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A strong statement of cash flows indicates that significant cash is being generated by

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User Lawiusz
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Final answer:

A strong statement of cash flows indicates that significant cash is being generated by reinvesting a portion of the profits made by the business.

Step-by-step explanation:

A strong statement of cash flows indicates that significant cash is being generated by reinvesting a portion of the profits made by the business. When a company reinvests its cash flow into improving its factories, hiring more employees, or purchasing technology, it can produce more products, leading to increased sales and a larger cash flow in the next sales period. As long as the reinvested cash flow is greater than the depreciation on the equipment, the company can continue to grow.

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User Makela
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