If a company's cash flow exceeds its expenses, what is the likely impact on demand for its products?

When a company's cash flow exceeds its expenses, this typically indicates that the company has a healthy financial standing. With surplus cash flow, the company is likely to have more resources to invest in various areas that can enhance its product offerings and marketing efforts. This can lead to increased production capabilities, improved product quality, and broader marketing outreach, all of which can stimulate demand for its products.

Furthermore, a company with strong cash flow might also choose to lower prices or offer promotions to attract more customers. This added investment in production and marketing can create a more favorable perception of the company's products among consumers, thus driving up demand.

Additionally, positive cash flow can enhance customer confidence in the company's stability and reliability, which may also encourage more purchases. Therefore, with the ability to fund operations, invest in growth, and respond to market demands, the company is positioned to see an increase in the demand for its products.