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Hi
I want to ask that in the going concern topic there is a condition of “Negative Cash flows”,
what exactly it means? does it means that the liabilities are more than the assets or expenses are greater than the revenue?Thanks
As it stated on page 33 it is “negative OPERATING cash flows” which means there is net cash USED in operating activities rather than net cash FROM operating activities.
If you think about how that amount is derived in a statement of cash flows then yes it could be due to operating losses (expenses exceed revenue) and/or cash outgoings (to pay suppliers and employees) exceed cash receipts – e.g. if there was a breakdown in credit control. (But such analysis would be interpretation in FR – not for AA.)
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