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CIRO Daily Challenge — May 18, 2026 | EnCiro | EnCiro

Daily Challenge/May 18, 2026

🔥 Daily ChallengeISESecurities analysis and investment theoryMedium

How should an institutional analyst interpret a negative Cash Flow from Investing Activities (CFI) for a capital-intensive manufacturing firm?

1 attempts · 100% correct

It signifies that the firm is returning significant capital to its lenders and equity investors.

It is often a positive sign of healthy growth, indicating the firm is investing in future productive capacity.Correct

It indicates that the firm's day-to-day operating expenses are exceeding its earned revenues.

It is a primary source of short-term liquidity used to pay quarterly dividends to shareholders.

Why

Negative CFI is common for growing firms as they spend cash on Capital Expenditures (CapEx) to build future capacity.

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