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“Debt repayment may mean that a profitable company has negative cashflow.”
What is meant by this statement?Let’s say you earn $2,000 per month and that you find that comfortable to live on.
However, you have to repay a loan of $10,000 from the bank.
IN that particular month cash inflows will be $2,000 and outflow to the ban will be $10,000 (plus outflows for normal expenditure). Therefore, a negative outflow of at least $8,000.
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