Excessive attachment to accrual accounting has resulted in the relative neglect of cash flow information. However, it is increasingly being recognized that cash flows also provide important information from a perspective different from that of accounting earnings. In Korea, the cash flow statement has been prepared since 1994, and since then, cash flow information has begun to receive renewed attention. Because cash flows are relatively more difficult to manipulate compared to accounting earnings, the relative information value of cash flows may increase in situations where the reliability of accounting earnings is in doubt. Firms in poor financial condition are more likely to use accrual adjustments as a means of earnings manipulation. Based on this reasoning, this study aims to empirically test whether the relative information value of cash flows increases when a firm's financial condition is poor. The empirical results of this study indicate that cash flows possess incremental information value beyond accounting earnings in explaining firm value. In particular, the results show that the relative information value of cash flows increases as a firm's financial structure deteriorates. Furthermore, it was found that cash flows serve as highly important information for predicting corporate bankruptcy two to four years prior to failure—precisely the period during which earnings manipulation is expected to be greatest. In summary, the results of this study confirm the information value of cash flows as a complementary indicator to accrual-based accounting earnings.