Financial Planner Interview Question:

Tell me is it possible for a company to have positive cash flow but be in serious financial trouble?

Submitted by: Muhammad

Yes, it is. A company that is selling off inventory but delaying payables will show positive cash flow for a while--even though they're in trouble. Another example would be where a company has strong revenues for the period but future forecasts show that revenues will decline. This would happen when a company hasn't focused on making sure there were new prospects/sales in the pipeline.
Submitted by: Muhammad