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27 January, 16:33

Which of the following is a common finding in looking at the statement of cash flows of a declining company?

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  1. 27 January, 16:51
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    These are the options for the question:

    a) A negative cash flow from operating activities

    b) A negative cash flow from investing activities

    c) A significant positive cash flow from financing activities

    And this is the correct answer:

    a) A negative cash flow from operating activities

    Explanation:

    Declining companies are characterized by a lack of revenue from regular operating activities.

    If cash flow from operating activities is negative, it means that the company is not making enough money to meet its obligations, and that will likely cease to exist in the near future unless big changes happen.
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