A clean quantitative framing is this: when cash flow and accrual earnings diverge persistently, the cash flow is usually right. Mechanism: Accrual accounting gives management discretion. Cash flow is harder to fake because it tracks actual money entering and leaving the business. A persistent gap where earnings lead and cash flow lags is a classic prelude to restatement or write-down. Market translation: If a company reports record net income but operating cash flow has been flat or negative for multiple quarters, something in the accrual chain is likely being stretched. Failure mode: The mistake is treating occasional divergence as alarming. The signal is in persistence and magnitude, not in single-quarter noise. Review question: Write down the state variable you would monitor first if this thesis started to drift. That is the kind of small conceptual habit that compounds into better decisions over time.