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Chapter 10. Analysis Tool #7: Financial ... > Detecting Potential Busted Cash Burn...

Detecting Potential Busted Cash Burners

Detecting potential busted cash burners entails comparing a company's cash flow to its working capital. Let's define those terms first.

Cash Flow

A company could be burning cash, meaning that it is spending more cash than it takes in (negative cash flow), even though it reports positive earnings quarter after quarter.


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