Final answer:
The cash flow statement shows the inflow and outflow of cash in a company. It can be positive, negative, or neutral.
Step-by-step explanation:
The cash flow statement is a financial statement that shows the inflow and outflow of cash in a company over a specified period of time. It provides information about how effectively a company manages its cash to generate and sustain its operations. Cash flow can be positive, negative, or neutral.
A positive cash flow indicates that the company has more cash coming in than going out, which is generally seen as a good sign. It means the company is able to cover expenses, invest in growth opportunities, and potentially distribute dividends to shareholders.
A negative cash flow, on the other hand, indicates that the company is spending more cash than it is receiving. While this may not necessarily be a red flag, it does raise concerns about the company's financial health and sustainability if it continues over a long period of time.