How Does A Cash Flow Statement Reflect Changes In Working Capital Balances Over An Accounting Period?
A cash flow statement represents a company’s incoming and outgoing money and a working capital represents the day to day operating liqudity of a company, the net inflows and outflows that a cash flow statement shows decides for the positive working capital or a negative working capital. Positive working capital means that the company is able to pay off its short-term liabilities. Negative working capital means that a company currently is unable to meet its short-term liabilities with its current assets.
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