Final answer:
A decrease in inventory will increase cash flows for a company.
Step-by-step explanation:
A decrease in inventory will increase cash flows for a company.
When a company decreases its inventory, it typically means that it has sold more products than it has purchased. This leads to a decrease in the cash tied up in inventory and an increase in the company's free cash flow.
Free cash flow is the amount of cash a company has available after deducting expenses and capital investments. By reducing inventory, a company can generate more free cash flow, which can be used for various purposes such as investing in growth opportunities or paying off debt.