7. Which of the following statements about the earnings quality of a company is least accurate?
A. The objective of analyzing earnings is to understand the persistence and sustainability of
earnings
B. Bankruptcy prediction models are used to quantify the likelihood that a company will
default on its debt and/or declare bankruptcy.
C. The higher the Z-score, the higher the probability of bankruptcy of a company.
LO.i: Describe indicators of cash flow quality.
LO.j: Evaluate the cash flow quality of a company.
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