An average business typically matches what in terms of finances?

The correct choice reflects the principle of aligning the maturities of liabilities with assets, which is essential for maintaining a healthy financial structure within a business. This matching approach minimizes financial risk, particularly liquidity risk, ensuring that the business can meet its long-term obligations as they come due.

When liabilities (such as loans or bonds) have a similar maturity to the duration of the assets being funded (like property, plant, and equipment), it creates a stable financial environment. If a business finances long-term assets with short-term debt, it risks facing liquidity issues when the obligations come due, particularly if the assets do not generate immediate cash flow.

The other options do not illustrate this fundamental matching principle as effectively. Matching long-term investments with short-term financing, for example, increases risks because short-term liabilities could come due before the returns on long-term investments materialize. Similarly, aligning debt levels with operational cash flow is more about operational efficiency and sustainability rather than directly matching durations. Lastly, matching revenue with inventory purchases does focus on operational aspects but does not address the maturity alignment that is crucial for financial stability.

Thus, aligning maturities of liabilities with those of assets helps safeguard against the risks of cash flow mismatches, reinforcing the importance of financial balance.