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:

Marginal Tax Rate

The tax rate applied to the last dollar of income, representing the rate at which additional income is taxed.

Taxable Income

The portion of an individual’s or corporation's income that is subject to taxes by the government.

Average Tax Rate

The ratio of the total taxes paid to the overall income, found by dividing the aggregate amount paid in taxes by the total income.

Income Tax Schedule

A chart or formula used to determine the tax rate applied to various levels of income.