Negative free cash flow invariably signals poor performance.

Question

Quizplus · Accepted Answer

Negative free cash flow can occur for a variety of reasons, such as investments in growth opportunities, acquisitions, or paying down debt. Therefore, it is not always a sign of poor performance. It may be a strategic decision by the company to invest in future growth. However, if negative free cash flow persists for an extended period, it may indicate that the company is not generating enough cash from its operations to support its growth or debt obligations, which can lead to financial distress.

Negative Free Cash Flow Invariably Signals Poor Performance