Earnings Quality and Cash Conversion A Structural Interpretation of Accounting Net Income, Operating Cash Flow, and Liquidity Resilience

This work proposes a structural framework for interpreting earnings quality through the joint reading of accounting net income, operating cash flow, and ending cash position. The analysis does not seek to reconcile accrual and cash measures, nor to establish normative thresholds. Instead, it articulates how the persistence and stability of cash conversion condition the economic meaning of reported profitability. By introducing a minimum recommended reference point for cash conversion and integrating prudential liquidity buffers relative to the operating cycle, the paper provides a coherent interpretative lens applicable across firms and contexts. The framework is designed for analysts, executives, and researchers seeking to improve the reliability of profitability assessment without resorting to mechanical rules or country-specific assumptions.