Sir when there is an increase in working capital or operating cycle its very uncertain to say whether the profits will decrease or increase right ?
It may or may not decrease profitability
But we do need to keep in mind that without cashflows
We cannot pay dividends
We cannot pay wages and salaries
We cannot pay the companies taxes , electricity bills etc
Am I correct sir
Thank you ?
Ask the Tutor ACCA FM
Operating cash flows
Yes, you are correct.
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