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Suppose you noticed a cash deficit in financing activities. What would cause a cash deficit in this section? Is it a good or bad thing?

User Santthosh
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Final answer:

A cash deficit in the financing activities section of a cash flow statement indicates that a company has spent more cash on financing activities than it has received. This is generally considered a bad thing because it means the company is using more cash than it is generating.

Step-by-step explanation:

A cash deficit in the financing activities section of a company's cash flow statement means that the company has spent more cash on financing activities than it has received. This can happen when a company takes on debt or repays debt, pays dividends to shareholders, or makes large capital expenditures. A cash deficit in this section is generally considered a bad thing because it indicates that the company is using more cash than it is generating from its financing activities.

User Bafla
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