MANAGEMENT

Detailed explanation-1: -Negative cash flow is when your business has more outgoing than incoming money. You cannot cover your expenses from sales alone. Instead, you need money from investments and financing to make up the difference.

Detailed explanation-2: -The negative number in cash flow to creditors indicates the cash outflow to the creditors is less than the amount which is to be paid to the creditors in the form of the interest paid or the partial or full payment of the principal amount for the credit purchases done or funds taken from them.

Detailed explanation-3: -One-off occurrences of negative cash flow are normal and inevitable in business. However, when negative cash flow stretches for months, you should be worried. If your expenses continuously outweigh revenue, it will become for you to meet up with running costs, break-even, and make a profit.

Detailed explanation-4: -This phenomenon can be explained by the fact that commercial banks sell cash. A well-performing bank creates an outflow of cash since it sells more and more cash through lending. Consequently, it should be logical that well-performing commercial banks have negative operating cash flows due to increased lending.