Significance of Cash Flows

question 10

Essay

Significance of cash flows
Saxony,Inc.is a relatively new business.In its first three years of operations,the company has recorded positive and increasing net cash flows from its operating activities.In each of these three years,the company has also reported a net loss on its income statement.Suggest at least one plausible explanation for these financial results.Given the net losses in the first three years of operations,should investors be concerned about the solvency and future profitability of Saxony? Explain.

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Definitions:

Pain

An unpleasant sensory and emotional experience associated with actual or potential tissue damage, or described in terms of such damage.

Phantom Limb Sensations

The perception of sensations or pain in a limb that has been amputated.

Anosmia

A loss of the sense of smell.

Tinnitus

A medical condition characterized by the perception of noise or ringing in the ears when no external sound is present.