Can a company report negative net cash flows from operating activities for the year on the statement of cash flows but still have positive net income on the income statement. Explain.
Can a company report negative net cash flows from operating activities for the year on the statement of cash flows but still have positive net income on the income statement. Explain.
Can a company report negative net cash flows from operating activities for the year on the statement of cash flows but still have positive net income on the income statement. Explain.
Can a company report negative net cash flows from operating activities for the year on the statement of cash flows but still have positive net income on the income statement. Explain.
Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).
Expert Solution
Step 1
A Cash flow statement is a part of financial statement which summarizes that amount of cash entering and leaving a company. It summarizes the cash inflow and cash outflow of the company. Cashflow statement will guide you to how much cash we require for a particular period.
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