Calculating quality-of-income ratio

Question

I know that you calculate it = Cash flow from operating activities/Net Income, and my numbers are (208,932)/(211,600) - But what does the result mean?

Answer 1

Academics have demonstrated that shares of companies with high cash flow/net income ratios outperform those with low cash flow/net income ratios, with much of the outperformance occurring on earnings announcements. So, by using the cash flow/net income ratio as a gauge of earnings quality, you can reduce the likelihood of being burned by a profit shortfall. Over time, avoiding such shortfalls can enhance returns considerably.

I tend to think that if both are consistently negative, then the company is heading for trouble. It has no cash flow, and is incurring losses. What could be worse?