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Statement of Cash Flow and Earnings

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The statement of cash flows is a very important statement. In fact, the FASB and other authorities recently published an article that implies some changes may be in order. Historically, earnings have been the main measurement of profitability of a firm. Today, some folks believe that the cash flow statement may be a more appropriate predictor.

Do you agree? Why or why not?

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This solution discusses the cash flow statement.

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Hello. I provide the following to assist you.

It is important to know the earnings of a business to understand its profitability. However, a cash flow statement can provide much more information than just earnings. A cash flow statement helps a company prevent cash shortage, helps the company and its investors understand whether or not a company is financially sound. Further, they are provided much more frequently than earnings statements. These statements will provide information for the company that might be helpful in ...

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