Firms with significant net income always have significant cash generated from operating activities.

Question

Quizplus · Accepted Answer

It is possible for a firm to have significant net income but not necessarily have significant cash generated from operating activities. This can happen if the firm has non-cash expenses or gains/losses, or if the firm has significant changes in working capital (e.g. accounts receivable, accounts payable) that affect cash flows.

Firms with Significant Net Income Always Have Significant Cash Generated