Which of the following would indicate high quality earnings for a company?
A)Increasing revenue while cash from operations is stable.
B)Increasing net income while cash from operations decreases.
C)Revenue and net income that move together.
D)Net income and cash flow from operations that move together.

Question

Quizplus · Accepted Answer

Net income and cash flow from operations that move together indicate that the reported earnings are backed by actual cash generated by the company's business operations. This suggests that the company's financial performance is sustainable and not solely based on accounting adjustments or non-operational items.

Which of the Following Would Indicate High Quality Earnings for a Company