How can a rapid increase in sales produce a negative cash flow?
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Most people are accustomed to going to the store and paying by cash or a credit card and these types of transactions always result in positive cash flow to the business. Imagine however that you are a manufacturer. While you might get an order (which is of course a sale), you now have to produce that order which means any material suppliers might theoretically need to get paid before you get paid from your customer.

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First answer by Craig Walenta. Last edit by Craig Walenta. Question popularity: 73 [recommend question]

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