1/ "*A company’s value equals the present value of future cash flows.
*While convenient, earnings provide limited information about future cash flows.
*The ongoing shift to an intangible-based economy renders earnings even less useful." Michael Mauboussin

2/ "Earnings do not consider future capital needs. Many firms require higher levels of inventory and accounts receivable as they grow. These working capital investments are true cash outlays not reflected in earnings, leading to a potential gap between earnings and cash flow." MM

3/ "When a growing company operates with a negative cash conversion cycle, where for every incremental dollar of sales, current liability growth exceeds current asset growth, leading to a positive cash flow contribution." Cash flows can vary depending on a firm's business model.

4/ "Earnings don't consider the cost of capital. In order for a company to create shareholder value, it must generate returns on incremental investments in excess of the cost of capital. However, firms can make investments that add to earnings per share but fail to create value."