Question

A firm shows net profit of ₹80 lakh in P&L. However, receivables and inventory increased sharply and operating cash flow is negative ₹40 lakh. The borrower seeks enhancement in working capital. What is the most appropriate credit inference?

A Profit ensures safety
B Negative CFO indicates liquidity stress
C Investing activity caused problem
D Financing structure is weak
E No impact on WC assessment
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