Asked by Chloe Francis on May 08, 2024
Verified
The cash flow on total assets ratio can be used as an indicator of earnings quality.
Cash Flow On Total Assets
A performance metric that shows how efficiently a company can generate cash flow from its total asset base.
- Grasp the calculation and interpretation of cash flow ratios.
Verified Answer
AM
Aashan MeiyappanMay 12, 2024
Final Answer :
True
Explanation :
The cash flow on total assets ratio, which measures the cash generating ability of a company's assets, can be used as an indicator of earnings quality because it reflects how well the company is converting its profits into cash, thus providing insights into the sustainability and quality of its earnings.
Learning Objectives
- Grasp the calculation and interpretation of cash flow ratios.
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