If a company reports a large amount of net income on its income statement during a year, the firm could have
A) positive cash flow.
B) negative cash flow.
C) zero cash flow.
D) all of these choices are correct.

Question

Quizplus · Accepted Answer

Net income does not directly correlate with cash flow. A company can report a large net income and still have positive, negative, or zero cash flow due to non-cash expenses, changes in working capital, or timing differences between recognizing revenue and receiving cash.

If a Company Reports a Large Amount of Net Income