- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 4. Analyzing Statements of Cash Flows I
- Subject 1. Linkages Between the Financial Statements
CFA Practice Question
A company's ability to succeed ultimately depends on its ability to ______
B. design superior products.
C. generate cash.
A. market a product effectively.
B. design superior products.
C. generate cash.
Correct Answer: C
A company needs cash to satisfy creditors and investors. Ultimately, a company must generate cash to succeed.
User Contributed Comments 7
| User | Comment |
|---|---|
| surob | Cash is King!!! |
| ridone | "generate cash" in this question effectively means "make a profit" |
| Bududeen | no! profit and cash are different. a co. can be profitable but lacks cashflow.If ths is the case it will be in trouble. does credit crunch rings a bell!!! |
| sh21 | way to go bududeen! |
| bantoo | very important point raised by bududeen! there are many real estate companies which are profitable but lacks adequate liquidity. |
| kahh | C.R.E.A.M - Cash Rules Everything Around Me |
| jonan203 | Kahh, do you by any chance work at WuTang Financial? |