Cash flow from operations is often used as a check on the quality of a firm's earnings.

Name: Cash flow from operations is often used as a check on the quality of a firm's earnings.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Cash flow from operations is used to assess the quality of a firm's earnings because it shows how much cash is being generated from the company's core business operations, as opposed to accounting profits which can be influenced by non-cash items and accounting policies.

Cash Flow from Operations Is Often Used as a Check