In cash flow management, what does a positive operating cash flow indicate about an enterprise?
Answer and explanation
Correct answer: C. The core business operations generate sufficient cash to sustain and expand activities
- Step 1: Positive operating cash flow demonstrates that an enterprise generates more liquid cash from its core trading operations than it spends on operating expenses, proving business self-sustainability. Answer: The core business operations generate sufficient cash to sustain and expand activities. Why not the others: Taking out loans creates financing cash flow, selling machines is investing cash flow, and tax arrears are liabilities.
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