What is a negative cash flow?
When a company spends more than it receives during a set period of time, typically a quarter, the company is said to have a negative cash flow. Negative cash flows are often viewed as indicators of financial ill health by people who are assessing companies to determine whether or not to invest in the company. However, many things can influence cash flow, and a negative cash flow should not necessarily be seen as a black mark because there are many reasons for a company to experience a temporary negative cash flow. Publicly traded companies send out documentation of their financial circumstances to their shareholders so that the shareholders can get an idea of how well the company is doing. This documentation typically includes a cash flow statement, which breaks down the cash inflow and outflow and shows the net change in cash flow, which can be positive or negative. The cash flow statement typically includes operating, financing, and investing activities, each of which can generate po
