A new, fast-growing company may typically have which of the following patterns of cash ﬂows?
A) Negative cash ﬂows from operations, cash outﬂows from ﬁnancing and cash inﬂows from investing.
B) Negative cash ﬂows from operations, cash inﬂows from ﬁnancing and cash outﬂows from investing.
C) Positive cash ﬂows from operations, cash outﬂows from ﬁnancing and cash inﬂows from investing.
D) Positive cash ﬂows from operations, cash inﬂows from ﬁnancing and cash outﬂows from investing.

Question

Quizplus · Accepted Answer

Fast-growing companies often have negative cash flows from operations due to heavy investment in growth opportunities. They typically finance this growth through external financing (cash inflows from financing) and spend on investments like equipment or acquisitions (cash outflows from investing).

A New, Fast-Growing Company May Typically Have Which of the Following