You are preparing some projections for Erratic, Inc., and are forecasting a reduction in sales of $15\%$ next year, with an increase of $15\%$ the following year. You consider that all other drivers, such as accounts receivable days, accounts payable days, and inventory days, will remain the same, and there will be no change in margins. What is likely to happen to cash flow over the next $2$ years?

Cash flow will likely increase in year $1$ and then decline in year $2.$

Cash flow will likely decline in year $1$ and increase in year $2.$

Provided the business is profitable, cash flow will increase in both years.