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Basic Question 2 of 3

Which of the following statements is most accurate?

A. For mature companies, it would be preferable for financing activities to be the primary source of cash flows.
B. If a company has a large net income despite its negative operating cash flow, then this may be a sign of poor earnings quality.
C. One approach to the common-size analysis of the cash flow statement involves expression of each cash flow (inflows and outflows) as a percentage of total cash inflows.

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I was very pleased with your notes and question bank. I especially like the mock exams because it helped to pull everything together.
Martin Rockenfeldt

Martin Rockenfeldt

Learning Outcome Statements

calculate and interpret free cash flow to the firm, free cash flow to equity, and performance and coverage cash flow ratios

CFA® 2025 Level I Curriculum, Volume 2, Module 5.