Accounting 26th Edition by Carl Warren,James Reeve,Jonathan Duchac

Exercise 40

Using the statement of cash flows
You are considering an investment in a new start-up company, Giraffe Inc., an Internet service provider. A review of the company's financial statements reveals a negative retained earnings. In addition, it appears as though the company has been running a negative cash flow from operating activities since the company's inception.
How is the company staying in business under these circumstances Could this be a good investment