Assume that you are working part-time as an accountant for a small proprietary company, and the shareholders are all members of the board of directors (BOD). The BOD wants to invest excess company funds in shares and seek your advice. You have evaluated ASX listed companies based on the available financial records and given board members a report selecting 20 companies that you think suitable for investment of these funds. Most of your evaluation is based on accounting ratios and the board does not believe the financial ratios which are prepared under an accrual basis of accounting. Particularly, board members criticised the earnings based ratios (e.g EPS, ROE, etc) claiming that earning figures are pre-determined, and are subject to manipulation and accounting adjustments based on judgement. The board members believe more highly in cash flow figures when making such investment decisions; however your recommendations place high weight on the earnings numbers. Your task is to write a report for the BOD that includes the following aspects to explain the usefulness or otherwise of bottom line earnings and cash flow from operations in making investment decisions.