A cumulative cash deficit indicates that a firm:

A) Has at least a short-term need for external funding.
B) Is facing long-term financial distress.
C) Will go out of business within the year.
D) Is capable of funding all of its needs internally.
E) Is using its cash wisely.

Cumulative Cash Deficit

The total amount by which a company's cash outflows exceed its cash inflows over a certain period, indicating a need for additional financing or cost reductions.

External Funding

Capital that comes from outside of a company, including loans, lines of credit, or equity investments from external investors.

Financial Distress

A situation where a company is struggling to meet its financial obligations and is at risk of bankruptcy.