It is vitally important for a company to pay its current liabilities. What is called “current” is either the benefits to be received, or obligations to be met in one-year period. Combining these two definitions, companies care about the ability of current assets to meet current liabilities. If the current assets cannot match current liabilities, companies will have to either convert their non-current assets, which are usually used in providing capacity for operations, into current assets (in most cases cash) or will have to extend the maturities to longer terms with an additional amount of interest. Therefore, companies operating with too much share of current liability in total financing is usually accepted as too much risky to either invest or lend. On the other hand, if the company finances its operations mostly by using long-term financing options, the cost of financing will incur more compared to short-term financing, in terms of either interest or dividends. The correct answer is C.