A company that has a positive cash flow from operating activities and a negative 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 positive cash flow from operating activities indicates that the company's core business is generating cash, while a negative cash flow from investing activities indicates that the company is investing in long-term assets. It is not necessarily an indicator of poor financial health if a company is selling long-term assets to pay current liabilities, as long as it is part of a strategic plan and not a permanent solution. It depends on the specific circumstances and context of the company's financial situation.

A Company That Has a Positive Cash Flow from Operating