A company that has a negative cash flow from operating activities and a positive cash flow from investing activities may be in poor financial health and having to sell its long-term assets to pays its current liabilities.

Question

Quizplus · Accepted Answer

A negative cash flow from operating activities means that the company is not generating enough cash from its core business activities. A positive cash flow from investing activities indicates that the company is selling its long-term assets, which may not be sustainable in the long run. This suggests that the company could be in poor financial health and relying on the sale of assets to meet its current liabilities.

A Company That Has a Negative Cash Flow from Operating