This is not a good sign. One of the important things for companies to do is to turn the total earnings into a stable flow of cash.
But if cash outflow is larger than inflow then companies are mostly sitting on negative cash flow. The difference is being covered up by borrowing at low rates. These loans put strain on the future cash flow. Without any reserves to fall back on there might come a time when these companies will be strapped for cash.
But if cash outflow is larger than inflow then companies are mostly sitting on negative cash flow. The difference is being covered up by borrowing at low rates. These loans put strain on the future cash flow. Without any reserves to fall back on there might come a time when these companies will be strapped for cash.