Earnings are important because:

Question

Quizplus · Accepted Answer

All of the given options are correct. Increased earnings indicate that the company is generating more profits, which can result in an increase in the equity value of the company. Earnings are also used to assess management performance and determine if they are making sound decisions that positively impact the company. Additionally, earnings are used to predict future cash flows, which is crucial in decision-making processes such as investing and budgeting.

Earnings Are Important Because