Cash flow is the most immediate indicator of an impending problem in the firm.

Question

Quizplus · Accepted Answer

Cash flow reflects the inflows and outflows of cash in a business, and provides an indication of the firm's liquidity position. A negative cash flow or insufficient cash flow can indicate a problem in meeting the firm's financial obligations, including paying suppliers, employees, and lenders. Therefore, cash flow is considered a critical indicator of the firm's financial health, and any issues with cash flow should be addressed immediately before they escalate into a bigger problem.

Cash Flow Is the Most Immediate Indicator of an Impending