If operating cash ﬂow is negative, then __________________.

Question

Quizplus · Accepted Answer

Operating cash flow being negative only means that the cash generated from the firm's operations is not enough to cover its expenses. It does not necessarily mean that the firm is bankrupt or cannot pay dividends. Cash flow to bondholders or stockholders is also not directly related to operating cash flow. However, it is possible for cash flow from assets to be positive even if operating cash flow is negative if the firm's investments generate more cash than its operations consume.

If Operating Cash ﬂOw Is Negative, Then __________________