When assessing the sustainability of a firm's cash flows, analysts will prefer to see cash growth generated from which of the following sources?

Question

Quizplus · Accepted Answer

Cash flow from operating activities is the preferred source of sustainable cash growth as it reflects the cash generated by the company's core business operations. Cash flow from investment activities can be volatile and dependent on external factors, while cash flow from financing activities may indicate a lack of profitability or a reliance on external funding sources. Cash flow from extraordinary events is also not a reliable source of sustainable cash growth as it is not a recurring or predictable source of cash flow.

When Assessing the Sustainability of a Firm's Cash Flows, Analysts