The most important segment of a cash flow statement is the Operating Activities section, as this shows how much operating income a company has generated and therefore provides insight into its ability to generate profits. This section reveals whether or not the company’s operations are generating sufficient cash flow, which can be used to sustain current activity or reinvest in new projects. A positive cash flow indicates that the business is able to cover its expenses and stay afloat while a negative cash flow indicates that it may need to borrow funds or liquidate assets (Gill & Biger, 2017).
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