Why is it a bad sign if cash flow from operations is consistently negative?

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Why is it a bad sign if cash flow from operations is consistently negative?

2006-10-16 04:55:12 · 2 answers · asked by scott S 1 in Local Businesses ➔ United States ➔ Houston

2 answers

it's bad because it shows that are either no sales are talking place or your purchases are more then your sales, hence the company may run into a cash flow problem, and maybe heavily in debt.

2006-10-16 05:05:32 · answer #1 · answered by nashpaty 3 · 0⤊ 0⤋

the object of being in business is to make money - if cash flow is consistently negative, they're obviously not very good at it!

2006-10-16 09:00:50 · answer #2 · answered by woodlands127 5 · 0⤊ 0⤋