A major metric of a company's health and its prospects for a long life is how much ________ it can generate.
A)cash flow
B)depreciation
C)tax deferral
D)net income

Question

Quizplus · Accepted Answer

Cash flow is the best choice for this because it represents the actual cash that a company generates from its operations. Net income can be manipulated by accounting methods and does not necessarily reflect the cash that is generated. Depreciation is a non-cash expense and tax deferral is a tax strategy, neither of which directly reflects a company's ability to generate cash.

A Major Metric of a Company's Health and Its Prospects