Cash flow provided (used) by investing activities is considered the most important category on the statement of cash flows because it is considered the best measure of expected profit.

Question

Quizplus · Accepted Answer

Cash flow provided (used) by investing activities is not considered the best measure of expected profit. It reflects the cash inflows and outflows related to the purchase and sale of long-term assets and investments, which may or may not contribute to future profitability. The best measure of expected profit is net income, which is reported on the income statement.

Cash Flow Provided (Used) by Investing Activities Is Considered the Most