Q.- Give conclusion or suggestion (what does this indicate and what to do) of the following data.. :
Operating Activity- 15,572
Investing Activity- (116)
Financing Activity- (17,391)
Dear student
Positive cash flow from operating activity indicates indicates that firm can deal with delays in payment from customers positively and has the flexibility and ability to expand when choose to do so.
But on the other hand investing cash flows showing negative signs which indicates company have taken wrong asset purchasing decisions which might be a warning sign for firm Also financial cash flows are in negative which shows firm has made payment to its long term debtors and also to its equity shareholders , which indicates firm have chosen wrong sources of funds .
Firm is in very bad position to recover and needs good sources of finance and investment decisions.
Regards
Positive cash flow from operating activity indicates indicates that firm can deal with delays in payment from customers positively and has the flexibility and ability to expand when choose to do so.
But on the other hand investing cash flows showing negative signs which indicates company have taken wrong asset purchasing decisions which might be a warning sign for firm Also financial cash flows are in negative which shows firm has made payment to its long term debtors and also to its equity shareholders , which indicates firm have chosen wrong sources of funds .
Firm is in very bad position to recover and needs good sources of finance and investment decisions.
Regards