Question

2. When assessing the sustainability of a company's cash flows, which is the most preferable source...

2. When assessing the sustainability of a company's cash flows, which is the most preferable source of cash growth for an analyst
or potential investor?
cash flow from investment activities
cash flow from operating activities
cash flow from financing activities
cash flow from extraordinary events
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Answer #1

The most preferable source of growth of cash flows for the company for an analyst or potential investor is the cash provided by the operating activities of the company.It is the main source of the company to meet its regular day to day needs and discretionary needs like reinvestment, dividend payment,stock buy backs etc.Cash flows from the opeatinf activities of the company are the cash flows from the actual business if the company and the contunity of any business depends upon its operations and it's ability to generate cash flows.

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