negative cash flow

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.
References in periodicals archive ?
5 May 2010 - Norwegian furniture maker Hjellegjerde ASA (OSL: HJE) said Tuesday afternoon it has lost its capital and it is struggling with negative cash flow.
The archdiocese is estimating a negative cash flow of $40 million by the end of 2005.
Depending on the current cash flow from the property, this could result in a negative cash flow.
For example, there will be significant negative cash flow in the early months of fill-up for your new project, as most of your costs are fixed; only about 25 percent of your operating expenses are variable.
Because all of the units in the block are occupied by rent regulated tenants, the block has a negative cash flow of $20,000 per year.
However, to achieve this success model, you will need significant dollars in your capital budget to fund a sophisticated sales and marketing program and to cover some substantial negative cash flow during the critical fill-up period:
From yearend 1996 to June 30, 1999, those companies with positive cash flow registered a median return of 11 percent compared with a negative 17 percent for the negative cash flow group.
Due to the fact that all apartments are occupied by rent regulated tenants, the block has a slight negative cash flow.