Negative cash flow

Occurs when spending in a business is greater than earnings.

Negative Cash Flow

A situation in which a company is spending more money than it is receiving. While this is common in many companies, especially in the first year or two of operation, it is obviously unsustainable in the long-term. A company with a negative cash flow often has to resort to loans or equity financing in order to keep its doors open.

negative cash flow

Having insufficient cash to pay all operating expenses of a business or an investment.The situation is common with new developments and is solved by the developer using its own money to help pay bills or, more often, by borrowing enough money in the development loan to cover cash shortfalls until the project reaches stabilized occupancy and the break-even point.

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References in periodicals archive

Excluding different items, the company generated free cash flow over the trailing 12 months, which makes the reported negative cash flow not a major concern, Halper tells investors in a research note.

Health Insurance cash flow not major concern, says Cantor Fitzgerald

The firm also led a consortium to establish a new internet-only bank, but the proposal was rejected by financial authorities because it did not specify how it would run the bank without a single strategic partner, and raise capital given its negative cash flow.

FSS looks into Toss for exaggerated advertisement

"Negative cash flow means my customer cannot come up with the money and may struggle to pay me," said Kathy Wilson, CBA, credit manager with AFX Lighting.

Cash Flow Impacts

This will have a negative cash flow impact of approximately EUR20m in Q2 2019.

Stockmann reports on negative tax decision by the Swedish Administrative Court on taxation in 2013-2016

The goal for your business is to create a positive cash flow, meaning you get cash before you pay others, versus a negative cash flow cycle, which is when you have to pay out before your money comes in.

Everyone loves growth #8211 that is, until the cash gets tight

Back then, a much smaller percentage, about 29 per cent, of US tech companies that had gone public from 2010 through that point, or had filed paperwork for an IPO, had negative cash flow from operations.

Burning cash as if there is no tomorrow

Ball and Shivakumar (2006) found that the timely loss recognition (negative cash flow) increases the power of earnings in predicting future cash flow.

Persistence of earnings and prediction of future cash flows: the role of timely recognition of bad news

An insurer with positive cash flow effectively has less interest rate risk than a similar company with negative cash flow. Positive cash flow will also accelerate reinvestment into a higher rate environment, providing the further benefit of higher income.

Cash flow and interest rate risk: the timing of an interest rate increase is hard to predict, but when it happens, it will have important consequences for insurers

Finally, interest rates on term debt are assumed to fall in the 2015-16 season, and any negative cash flow in 2014-15 adds to current liabilities and interest costs in 2015-16.

An updated assessment of dairy sector vulnerabilities

John's said it determined that a reorganization "is not a viable option" because of the negative cash flow. U.S.

Complex sale

"The buyer plans to implement significant positive changes that will convert the negative cash flow into a profitable operation."

Nursing home fetches $16m: IPA