Financially healthy companies

Question

Quizplus · Accepted Answer

Financially healthy companies should generate positive operating cash flows in most years, but it is not a guarantee that they will always generate positive operating cash flows. There could be some years where the company may have negative operating cash flows due to various factors. Positive investing cash flows are also desirable, but not a strict requirement for financial health. Total cash inflows may not always exceed total cash outflows if the company decides to invest in long-term projects or acquisitions that may require significant cash outflows initially but generate future cash inflows.

Financially Healthy Companies