4 Top-Rated Stocks To Bet On With Increasing Cash Flows

Achieving profit is no doubt a company’s goal, but having a healthy cash flow is imperative to its existence, development, and success. And why not? Even a company generating profits succumbs to failure and faces bankruptcy while meeting its obligations if it has a dearth of cash flow. However, one can efficiently tide over any market mayhem if it has the cash to shield it.

In fact, a healthy cash position indicates that profits are being efficiently channelized to the company’s reserves. This offers flexibility to make decisions, chase potential investments, and fuel its growth engine. It is indeed a true indicator of a company’s financial health and a measure of resiliency.

Analyzing a company’s cash-generating efficiency has indeed become more relevant amid the health crisis that gave rise to uncertainties in the global economy, market disruptions, and dislocations, as well as liquidity concerns.

To figure out this efficiency, one needs to consider a company’s net cash flow. While in any business cash moves in and out, it is net cash flow that explains how much money a company is actually generating.

If a company is experiencing a positive cash flow then it denotes an increase in its liquid assets, which gives it the means to meet debt obligations, shell out for expenses, reinvest in the business, endure downturns, and finally return wealth to shareholders. On the other hand, a negative cash flow indicates a decline in the company’s liquidity, which in turn lowers its flexibility to support these moves.

However, having a positive cash flow merely does not secure a company’s future growth. To ride on the growth curve, a company must have its cash flow increasing because that indicates management’s efficiency in regulating its cash movements and less dependency on outside financing for running its business.

Therefore, keep yourself abreast with the following screen to bet on stocks with rising cash flows.

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