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.

Correct Answer: B

If a company has a negative operating cash flow and still has a large net income nevertheless, this is a manifestation of the poor quality of the company's earnings.

A is incorrect because, for a mature company, operating activities, and not financing activities, should be the primary source of cash flows.

C is incorrect because common-sizing the cash flow statement entails the expression of each line item of cash inflow as a percentage of total cash inflows, and each cash outflow as a percentage of total cash outflow.