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Basic Question 2 of 3
Which of the following statements is most accurate?
A. For mature companies, it would be preferable for financing activities to be the primary source of cash flows.
B. If a company has a large net income despite its negative operating cash flow, then this may be a sign of poor earnings quality.
C. One approach to the common-size analysis of the cash flow statement involves expression of each cash flow (inflows and outflows) as a percentage of total cash inflows.
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I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
Learning Outcome Statements
calculate and interpret free cash flow to the firm, free cash flow to equity, and performance and coverage cash flow ratios
CFA® 2025 Level I Curriculum, Volume 2, Module 5.