One of the reasons why cash flow analysis is popular is because:
A)cash flows are more subjective than net income.
B)cash flows are hard to understand.
C)it is easy to manipulate, or spin the cash flows.
D)it is difficult to manipulate, or spin the cash flows.
E)None of the above.

Question

Quizplus · Accepted Answer

Cash flow analysis is popular because it is difficult to manipulate or spin the cash flows. Unlike net income, which can be subject to various accounting methods and adjustments, cash flows are a more direct measure of a company's liquidity and ability to generate cash. As a result, cash flow analysis is often seen as a more reliable indicator of a company's financial health.

One of the Reasons Why Cash Flow Analysis Is Popular