A balanced approach would be to fund all long-term assets - non-current assets plus permanent working capital - from long-term funds. This would amount to $37 million. In fact the company only has $35 million of long-term funds. They are using short-term funds even for some of the permanent current assets on the balance sheet. This is an aggressive policy but it risks liquidity problems. A conservative approach would have used long-term finance for some of the fluctuating current assets as well.
