Quiz – T/F: In finance, we are generally more interested in cash flows than in accounting profits

Fundamentals of Financial Management, Concise, 9e & 10e by Brigham and Houston


Determine if the following statement is true or false:

In finance, we focus on cash flows rather than on accounting profits. Free cash flow (FCF) is calculated as after-tax operating income plus depreciation expense minus the sum of capital expenditures and changes in net operating working capital.

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