d) is repaying debt every year. Obviously sales of investments are not part of a business's operations, which is sales of goods or services, and the related expenses. If the company borrowed money to purchase the intangible asset, the increase still appears in the cash flow from investing section. Companies may also prepay certain expenses for the future that are recorded as incurred expenses only over time. However, this amount reduces the total cash flow from investing activities. A business can report a negative cash balance on its balance sheet when there is a credit balance in its cash account. It is expressed aa negative in the section determining cash flow from OPERATIONS. This happens when the business has issued checks for more funds than it has on hand. This is a negative event for cash flow and may contribute to the "Net changes in current assets and current liabilities" on the firm's cash flow statement to be negative. If a firm has a negative cash flow from assets every year for several years, the firm (5 Points) a) may be continually increasing in size. If a firm has a negative cash flow from assets every year for several years, the firm: may be continually increasing in size. A negative cash flow to stockholders (-$3,255.80) indicates that the amount of stocks issued exceeds the dividends distributed and share repurchases. Cash paid to increase certain operating assets for the year, such as inventory purchase, is a form of cash outflow that, if large enough, could reduce total cash flow to be negative. In time the... See full answer below. When a negative cash balance is present, it is customary to avoid showing it on the balance sheet by moving the amount of the overdrawn checks into a liability account and setting up … An increase in which one of the following will increase operating cash flow for a profitable, tax-paying firm? Q8. Decreases in intangible assets appear the same way on the cash flow statement as increases. In this case, the negative cash flow to stockholders further justify that Dahlia Industries could be a new startup or is in its early years of operations, when investments from stockholders are necessary to invest in fixed assets for instance. The money borrowed by the company appears in the cash flow from financing section. c) is operating at a high level of efficiency. Negative cash flow is a usual occurrence in new businesses but in the long-run, a business cannot sustain this level of cash flow. Tressler Industries opted to repurchase 5,000 shares of stock last year in lieu of paying a dividend. depreciation. e) has annual net losses. b) must also have a negative cash flow from operations each year.