If a Company Reports Negative Net Cash Flow from Operating

question 101

True/False

If a company reports negative net cash flow from operating activities,positive net cash flow from investing activities,and zero net cash flow from financing activities,this suggests that the company is selling its productive assets to cover its operating activities outflows.Positive net cash flow from investing activities indicate sales of productive assets,and negative net cash flow from operating activities indicate a need for another source of cash to cover operating cash outflows.

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Definitions:

Compliance Technique

Strategies used to persuade or encourage individuals to agree to requests or demands.

Foot-In-The-Door

A persuasive technique where agreeing to a small request increases the likelihood of agreeing to a larger request later.

Door-In-The-Face

A persuasion strategy where a large, likely-to-be-rejected request is made first, followed by a smaller, more reasonable request.

Groupthink

A phenomenon that occurs within a group of people when the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.