Negative cash flow from investing activities on the statement of cash flows most likely indicates a company is ________.
A)borrowing more than it is paying off
B)buying more long-term assets than it is selling
C)paying off more of its debts than it is borrowing
D)in poor financial health

Question

Quizplus · Accepted Answer

Negative cash flow from investing activities means the company is spending more money on acquiring long-term assets such as property, plant, and equipment (PP&E) than it is generating from selling them or receiving from investments. This could indicate the company is expanding its operations or investing in new technologies or equipment, which may lead to future growth but require a significant upfront investment.

Negative Cash Flow from Investing Activities on the Statement of Cash