Managers often focus on cash flows, but reported accounting earnings are a better indicator of the company's economic health.

Name: Managers often focus on cash flows, but reported accounting earnings are a better indicator of the company's economic health.
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Question

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Reported accounting earnings can be manipulated through various accounting practices such as depreciation and amortization, whereas cash flows provide a more tangible measure of a company's actual liquidity and ability to pay its debts.

Managers Often Focus on Cash Flows, but Reported Accounting Earnings