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Leading question: What is an example of an incorrect conclusion that might be drawn from a profit and loss statement, if the user doesnt possess financial intelligence about the report?
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An example of incorrect conclusion that might be drawn from a profit and loss statement, if the user doesnt possess financial intelligence is:

Reported earnings consistently higher than cash flow: If cash flow from operating activities of a company is consistently less than the reported net income, it is a warning sign. The investor must ask why operating earnings are not turning into cash.

In this case, the user might not be bothered by high reported earnings, when in fact it is a major red flag as the operating cash flow generated by a company is less than the profit reported by the company.

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