While Creditors Rely Heavily on Cash flOw Information, Investors Do

question 58

True/False

While creditors rely heavily on cash flow information, investors do not need to be concerned with cash flows and can rely exclusively on earnings.

---

Definitions:

Direct Materials Cost

The cost of raw materials directly used in the production of products or services.

Sales

Revenue generated from the sale of goods or services.

Desired Profit

The target earnings a company aims for in a specific period as part of its financial and strategic planning.

Unit Variable Cost

The cost associated with producing one additional unit of a product, excluding fixed costs.