Operating cash flows of a firm should be exactly equal to the revenues and expenses that the firm reports on its income statement.

Question

Quizplus · Accepted Answer

Operating cash flows reflect the actual cash inflows and outflows from the operations of the firm, which may differ from the revenues and expenses reported on the income statement due to factors such as timing differences and non-cash expenses such as depreciation. Additionally, other items such as changes in working capital and investments in capital expenditures can also impact the operating cash flows of a firm.

Operating Cash Flows of a Firm Should Be Exactly Equal