negative cash flow

(redirected from Negative Cash Flows)

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 ?
Negative cash flows can create a need for capital calls.
During that critical fill-up period, the project may experience cumulative negative cash flows of perhaps $500,000.
When the limited partners purchased the partnership interest, the general partners had agreed to purchase all unsold limited partnership interests and to fund any negative cash flows.
Negative cash flows are projected to continue at both companies through 2007 due to continued share losses, restructuring costs and working capital outflows.
He also has 400 apartments all over the Upper East Side with negative cash flows of approximately $4003 per unit per month.
The notes are part of an $18 billion financing plan underway by Ford to shore up liquidity as it faces several years of very heavy negative cash flows.
The new facility provides a very modest boost to liquidity, which remains adequate to fund near-term negative cash flows.
Over the longer term, reversing negative cash flows will require the cooperation of the UAW, before and after the opening of the contract in 2007.
Negative cash flows, including restructuring costs, could exceed $7 billion in 2006, including working capital and restructuring outflows.
netGuru's independent registered public accounting firm stated in its report that the Company has experienced losses and negative cash flows from operations, sold a significant portion of its operating assets, made a partial liquidating distribution to stockholders during the year ended March 31, 2006, and is considering strategic alternatives for the disposition of its remaining operating assets.
The qualification was included as a result of the Company's recurring net losses and negative cash flows.
The unfavorable trend of revenues and key cost factors is expected to result in accelerated negative cash flows through 2006 and into 2007.