Hello, If a company’s CFO grows in line with net income, it precludes the possibility of earnings manipulation. What is ideal scenario for relation of CFO with NEt income I believe since NI = Cash + accruals has to be greater than the CFO (cash component) Thanks
Change in accruals, not accruals. I think you would generally expect NI and CFO to grow/shrink together for most companies. There will always be timing differences though. And there may be company/industry specific issues. But even if they do track each other, it doesn’t mean games aren’t being played.