If a company is to succeed over the long-term,a positive cash flow from operating activities is necessary.

Question

Quizplus · Accepted Answer

A company needs a positive cash flow from operating activities to sustain its operations, invest in growth opportunities, and meet its financial obligations over the long-term. This cash flow is generated by the day-to-day activities of the business, such as sales, customer payments, and supplier payments. Without a positive cash flow from operating activities, a company may be forced to rely on borrowing or equity financing, which can be costly and unsustainable over time.

If a Company Is to Succeed Over the Long-Term,a Positive