Asked by Ariah Scales on May 10, 2024
Verified
It is not unusual for a start-up company to experience total negative cash flows.
Negative Cash Flows
A financial situation where a company's outgoing cash exceeds the incoming cash during a specific period, potentially indicating financial trouble.
Start-Up Company
A company that is in the first stage of its operations, often characterized by high initial costs and limited revenue.
- Analyze financial flexibility and liquidity measures and how they reflect a company's ability to meet its obligations and take advantage of investment opportunities.
Verified Answer
BM
brenda mancillaMay 14, 2024
Final Answer :
True
Explanation :
Start-up companies often require large investments in research and development, marketing, and infrastructure before generating positive cash flows. This means they may experience negative cash flows in the early stages of their operations.
Learning Objectives
- Analyze financial flexibility and liquidity measures and how they reflect a company's ability to meet its obligations and take advantage of investment opportunities.