You are analyzing a startup company. Of course, it has a negative operating cash flow early on. But as you further analyze the company, what must you consider?Select an answer:Having a negative operating cash flow is fine if it is offset by investing activities.A negative operating cash flow is not a concern if the company has a significant amount of loans.A negative operating cash flow for a startup business is expected in the long-term.Having a negative operating cash flow is not sustainable in the long-term.

Having a negative operating cash flow is fine if it is offset by investing activities, whereas…

Answered: You are analyzing a startup company. Of…

You are analyzing a startup company. Of course, it has a negative operating cash flow early on. But as you further analyze the company, what must you consider?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter16: Statement Of Cash Flows

Section: Chapter Questions

Problem 3TP: Consider the dilemma you might someday face if you are the chief financial officer of a company that...

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Question

You are analyzing a startup company. Of course, it has a negative operating cash flow early on. But as you further analyze the company, what must you consider?

Select an answer:

Having a negative operating cash flow is fine if it is offset by investing activities.
A negative operating cash flow is not a concern if the company has a significant amount of loans.
A negative operating cash flow for a startup business is expected in the long-term.
Having a negative operating cash flow is not sustainable in the long-term.

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