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11 January, 08:58

Jake is a stockholder of several companies and he studies financial statements of these companies regularly. Why does he desire a healthy cash flow?

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  1. 11 January, 10:24
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    Because healthy cash flows indicates that the company is financially secure.

    Healthy cash flow means that companies earning a lot form its daily operations. In the perspective of stockholder, this can be used as an indicator that the company would give large amount of dividend at the end of its operational year, which brings more profit for stockholders such as Jake.
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