Answered: In the long run, is it more important…

In the long run, is it more important for a business to havepositive cash flows from its operating activities, investingactivities, or financing activities? Why?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter16: Statement Of Cash Flows

Section: Chapter Questions

Problem 12Q: Is there any significance that can be attributed to whether net cash flows are generated from...

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Question

In the long run, is it more important for a business to have
positive cash flows from its operating activities, investing
activities, or financing activities? Why?

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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