2 Why might the company want to use cash flow to reduce net debt? Chairmans statement (extract)...

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2 Why might the company want to use cash flow to reduce net debt?

Chairman’s statement (extract)
Operating cash flow was £43.0 million (2008: £30 million), representing 93% of adjusted operating profit, despite an increase in stock and debtors commensurate with the growth of the business. Net debt for the year was reduced to £15.4 million (2008: £21.8 million) as operating cash flow was more than sufficient to fund acquisitions (including further investment in DB Power Electronics), capital expenditure, dividend payments, tax and interest.
. . . .
Net debt for the year was reduced to £15.4 million (2008: £21.8 million) as operating cash flow was more than sufficient to fund acquisitions (including further investment in DB Power Electronics), capital expenditure, dividend payments, tax and interest.

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