Corporatefinanceinstitute com 1 The Corporate Finance Institute Accounting For more eBooks please visit

What Can the Statement of Cash Flows Tell Us? 
•
Cash from operating activities can be compared to the company’s
net income to determine the quality of earnings. If cash from
operating activities is higher than net income, earnings are said to be
“high quality.”
•
This statement is useful to investors because under the notion that
cash is king, it allows investors to get an overall sense of the cash
inflows and outflows of the company, whether these numbers are
positive, and achieve a general understanding of the company’s
overall performance.

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The Corporate Finance Institute
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The Corporate Finance Institute
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