Which of the following best describes medium-term financing?

Medium-term financing typically refers to funds that are required for a period ranging from one to five years, aimed at financing assets that may not fall strictly within the categories of short-term or long-term financing. This type of financing often includes loans and credit facilities that support the purchase of fixed assets, but it can also encompass working capital needs.

The inclusion of inventory, receivables, and tax liabilities in the description aligns well with medium-term financing since these components can represent both asset financing and operating needs over a medium timeframe. This financing helps businesses maintain adequate liquidity while allowing for strategic investments in growth and operational management.

In contrast, the other options do not encapsulate the broader scope of medium-term financing. Investments in fixed assets exclusively suggests a focus that would be more typical of long-term financing. Short-term loans serve immediate cash flow needs and are usually categorized under short-term financing. Finally, long-term bonds and equities are associated with capital raising efforts for periods beyond five years, thus not fitting the definition of medium-term financing.