Cash provided by operating activities fails to take into account that a company must invest in new fixed assets just to maintain its current level of operations.

Question

Quizplus · Accepted Answer

Cash provided by operating activities only reflects the current cash inflows and outflows of a company's operations. It does not consider the need to invest in new fixed assets to replace old ones, which is necessary for a company to maintain its current level of operations in the future.

Cash Provided by Operating Activities Fails to Take into Account