- CFA Exams
- CFA Level I Exam
- Study Session 7. Financial Reporting and Analysis (2)
- Reading 23. Understanding Cash Flow Statements
- Subject 3. Cash Flow Statement Analysis
CFA Practice Question
Which of the following items has become increasingly important as an analytical tool to determine the financial health of a business?
B. Cash flow from operations
C. Cash flow from investing and financing activities
A. Net income
B. Cash flow from operations
C. Cash flow from investing and financing activities
Correct Answer: B
Cash flow from operations has become increasingly important as an analytical tool to determine the financial health of a business. A company could be profitable and yet have no cash. Ultimately, a company must generate cash to succeed.
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