Cash ﬂow from investing activities is considered the most important category on the cash ﬂow statement because it is considered the best measure of expected earnings.

Question

Quizplus · Accepted Answer

Cash flow from investing activities measures the cash inflows and outflows associated with the purchase or sale of long-term assets, such as property, equipment, or investments. While important for understanding a company's investment activities, it is not considered the best measure of expected earnings. The net income or earnings per share are better indicators of a company's profitability and future earnings potential.

Cash ﬂOw from Investing Activities Is Considered the Most Important