In finance,we are generally more interested in cash flows than in accounting profits.Free cash flow (FCF)is calculated as after-tax operating income plus depreciation less the sum of capital expenditures and changes in net operating working capital.

Question

In finance,we are generally more interested in cash flows than in accounting profits.Free cash flow (FCF)is calculated as after-tax operating income plus depreciation less the sum of capital expenditures and changes in net operating working capital.​

Quizplus · Accepted Answer

This statement is true. Cash flows are considered more important in finance than accounting profits, and free cash flow (FCF) is a commonly used measure of a company's cash flow. FCF is calculated as after-tax operating income plus depreciation less the sum of capital expenditures and changes in net operating working capital.

In Finance,we Are Generally More Interested in Cash Flows Than