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Flashcards in Negative Operating Cash Flow / working capital Deck (2)
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1
Q

What is negative operating cash flow? (3)

A
  • operating costs are higher than revenue generated
  • company is making a loss
  • would lead to liquidation
  • in the long term
2
Q

What is negative working capital? (3)

A
  • current liabilities are higher than current assets
  • financing from creditors to meet day to day costs
  • if credit dries up then will go into liquidation