While cash flow is more often used in financial analysis, which of the following is not a reason to require firms to still report accounting profit? We need to keep accountants employed accounting profit proxies economic profit accounting pro
One reason why firms are still required to report accounting profit is because cash flow does not always provide an accurate representation of a company’s overall financial health. Accounting profits are able to provide insight into a firm’s operations and long-term prospects by examining items such as depreciation, amortization, inventory levels, taxes payable or receivable, and other non-cash expenses that may not be represented in a cash flow statement. This information can then be used by investors to make more informed decisions about the potential risks and rewards associated with investing in a particular company.
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