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If a company's cash flow statement is negative what does it mean?
Wiki User
∙ 9y ago
When there is a negative figure on a cash flow forecast or statement it may mean a variety of things are happening in the business:
It may be a seasonal business and may not have had sales (cash inflow) that month so the figure at the end of the month is negative because there have only been bills to pay (cash outflows) with no money coming in. A seasonal business may be an ice cream van (poor sales in cold months) or a fireworks shop (only open Oct / Nov / Dec).
It may mean that the business has unmanageable bills to pay (cash outflow) and has perhaps over estimated what the sales would be (cash inflow) and so has a negative balance at the end of the month.
Wiki User
∙ 11y ago
Wiki User
∙ 9y agoIt means that company has spent more for investments then it earns from investments for example company purchased asset which caused the cash out flow and not earned from any investing activity due to which there is no cash inflow from investing activity.
Wiki User
∙ 10y agoNegative cash from operating activities simply means that the operating activities of the business required more cash than those activities generated. In most cases, it means that the activity is operating at a loss from a profit and loss standpoint, but that is not always the case. Other reasons may include a high level of capital expenditures whose value will be realized beyond the current accounting period, or sales of inventory where the cash will be received outside the current accounting period.
Wiki User
∙ 9y agoIt means more cash is going out of the business than is coming into it over the period specified on the cash flow statement.
Wiki User
∙ 10y agoIt means that company has more outflows from financing activities then cash inflows that's why net cash flows are negative.
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Does the increase of AP on the statement of cash flow show a negative or positive effect on cash flow?
The increase of A/P on the statement of cash flow show?
Is The increase of AP on the statement of cash flow positive or negative?
positive as the cash flow
What is another name for cash flow of statement?
Another name of cash flow statement is fund flow statement.
What is cash-flow statement?
Cash flow statement is the statement which show the cash flow from operating, financing and investing activities.
Period expenses which do not affect the cash flow of the company should be excluded from the cash flow statement and how true is this statement?
Yes it is correct as cash flow statement only deals in cash so non cash items should be eliminated from cash flow statement.
What are the effects of negative cash flow?
effect of negative cash flow
Structure of cash flow statement?
structure of cash flow statement as follows:1
What if cash flow is negative?
Negative cash flow means cash outflow from business and overall negative cash flow means more cash outflows from business then cash inflow.
What statement reports Free cash flow?
Free cash flow is the sum of operating and investing cash flows, which are reported on the cash flow statement.
How is bank overdraft treated in the cash flow statement?
Prime purpose of preparing cash flow statement is to tally the closing bank balance with opening bank balance so if there is a bank overdraft or negative bank balance it will automatically adjusted when complete cash flow statement is prepared. If after the preparation of cash flow, cash flow balance and bank balance don't tally it means there is some mistake in cash flow statment and it should be reviewed for any correcions.
What is another name for the statement of cash flows?
Another name of cash flow statement is fund flow statement.
Features of Cash flow statement?
Sample cash flow statement as follows:1 - Cash flow from operating activitiesReceived from debtorsPayment to creditors2 - Cash flow from financing activitiesPurchase (sales) of asset3 - Cash flow from investing activitiesnew share capital introduced etc.
