According to the theory of constraints, which of the following is a financial measurement that can be used to measure the firm's ability to make money?
A) Operating expenses
B) Cash flow
C) Inventory
D) Sales
E) Dividends

Question

Quizplus · Accepted Answer

Cash flow is a direct measurement of a firm's ability to generate cash and make money. The other options (operating expenses, inventory, sales, dividends) are all indirect measurements and do not directly capture the firm's ability to make money.

According to the Theory of Constraints, Which of the Following