But in my opinion, the net cash flow reflected in the cash flow statement is more important, because the profit statement of an enterprise can be falsified, and the cash flow is not easy to be falsified. It will be better if the cash inflow is much greater than the outflow, especially after a few years.
In the long run, when the cash inflow is too large to pay the payable amount, it should be turned into profit. However, if the profit of the enterprise is high and the cash is tight, it may go bankrupt due to poor capital turnover.
When analyzing an enterprise, if the profit rate is high, but the net cash inflow is small, then the funds on the account are very tight and bad.
In fact, as a long-term analysis, the cash flow statement for several years can completely replace the income statement, and foreign countries pay more attention to it. You should focus on it. For example, the cash inflow of mobile communication companies is far greater than the outflow, and it doesn't matter if the profit decreases for some reason next year.
Some enterprises may have lower profits because of less dividends, but this can be seen from the cash flow statement.