The ratio of ________ to ________ is an indicator of the quality of a firm's earnings.
A) cash flow from operations, net income
B) liabilities, assets
C) dividends, interest expense
D) cash flow from operations, capital expenditures

Question

Quizplus · Accepted Answer

The ratio of cash flow from operations to net income is an indicator of the quality of a firm's earnings. A higher ratio indicates that a larger portion of the firm's net income is coming from cash flow from operations, which suggests that the firm's earnings are coming from sustainable sources, rather than one-time gains or accounting manipulations. This is important for investors who want to assess the long-term health and sustainability of a company.

The Ratio of ________ to ________ Is an Indicator of the Quality

The Ratio of to Is an Indicator of the Quality