Which is the most favorable change for an investor among a $10 increase in revenue, gross profit, or a decrease in capital expenditures (CapEx)?

A decrease in capital expenditures (CapEx) is often considered the most favorable change for an investor because it directly impacts cash flow positively. When a company reduces its capital expenditures, it is essentially freeing up cash that can be used for other purposes, such as paying down debt, reinvesting in the business, or returning capital to shareholders. This increase in available cash flow can enhance the overall financial health of the company and provide more flexibility for growth initiatives or shareholder returns.

In contrast, while a $10 increase in revenue and a $10 increase in gross profit are positive developments, they do not necessarily lead to increased cash flow in the same way. An increase in revenue may require more operational expenses to achieve that growth, meaning the actual impact on cash flow can be limited. Moreover, a $10 increase in gross profit is beneficial as it indicates that the company is generating more profit from its sales after accounting for the costs of goods sold, but it does not take into consideration other expenses that could still affect cash flow.

Thus, the decrease in CapEx stands out as the most favorable change because it directly improves cash flow and reduces the need for external financing, which can be more beneficial for investors in the long run.