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
