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Cash flow from assets measures the cash flows generated by the firm's assets.

If a firm is new, or if it's investing heavily to promote growth, its cash flow may be negative.

Cash flow from assets may calculated in the following way:

Operating Cash Flow - Net Capital Spending - Change in Net Working Capital (NWC)

Here's a breakdown of those components:

Operating Cash Flow = EBIT + Depreciation - Taxes

Net Capital Spending = Ending net fixed assets - beginning net fixed assets + depreciation

Change in NWC = Ending NWC - Beginning NWC

*where NWC is Current Assets - Current Liabilities

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11y ago
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15y ago

Negative Cash Flow is when you have more money going out than coming in. If you end a period with less cash than you started, you had negative cash flow. This is not the same as profit - you could make a profit for the period and still have negative cash flow.

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Q: What is negative cash flow from assets?
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