On the statement of cash flows of a healthy company, net cash from operating activities generally exceeds net income.

Question

Quizplus · Accepted Answer

Net cash from operating activities includes adjustments for non-cash items such as depreciation and changes in working capital, which are not reflected in net income. Additionally, cash flows from investing and financing activities can vary greatly and may not directly reflect the profitability of a company. As a result, it is not uncommon for net cash from operating activities to exceed net income.

On the Statement of Cash Flows of a Healthy Company