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Discuss show positive cash flows but be in grave trouble

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Reference no: EM131821755

1. Why do capital expenditures increase assets (PP&E), while other cash outflows, like paying salary, taxes, etc., do not create any asset, and instead instantly create an expense on the income statement that reduces equity via retained earnings?

2. Walk me through a cash flow statement.

3. Is it possible for a company to show positive cash flows but be in grave trouble?

Reference no: EM131821755

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