How do financial analysts refer to earnings that correspond closely to cash flows?
A)Cash flow per share
B)High quality earnings
C)Earnings determined on a cash basis
D)Low quality earnings

Question

Quizplus · Accepted Answer

Financial analysts refer to earnings that correspond closely to cash flows as "high quality earnings." This means that the reported earnings are a true representation of the cash generated by the business, rather than being inflated or manipulated through accounting practices. Cash flow per share is a measure that relates to cash flows, but it is not necessarily indicative of high quality earnings. Earnings determined on a cash basis would also be a good measure of high quality earnings, but this is not a common term used by financial analysts. Low quality earnings are earnings that are not a true representation of the cash generated by the business.

How Do Financial Analysts Refer to Earnings That Correspond Closely