Explain various patterns of cash-flows with correct examples. What are positive and negative cash flows.
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If cash inflows in any activity exceeds cash outflows from that activity, it is positive cash flow. In case cash outflow exceeds inflow it is negative cash flow.
For eg, if the company has sold plant and machinery worth Rs. 10,00,000 (cash inflow) and purchased a land worth Rs. 12,00,000 (outflow) during the same period, then its total flow of cash from investing activity will be Rs 2,00,000, which is negative cash flow as outflows exceed inflows of cash.
For eg, if the company has sold plant and machinery worth Rs. 10,00,000 (cash inflow) and purchased a land worth Rs. 12,00,000 (outflow) during the same period, then its total flow of cash from investing activity will be Rs 2,00,000, which is negative cash flow as outflows exceed inflows of cash.
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