Analysts look for red flags in financial statements that may signal financial trouble. Which of the following is a red flag that suggests that a company may be in trouble?

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter14: Corporation Accounting
Section: Chapter Questions
Problem 24MC: Most analysts believe which of the following is true about EPS? A. Consistent improvement in EPS...
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Analysts look for red flags in financial statements that may signal financial trouble. Which of the following is a red flag that suggests that a company may be in
trouble?
a decrease in days' sales in receivables from year to year
net cash provided by operating activities is consistently lower than net income
a reduction in the debt ratio
a decline in days' sales in inventory
Transcribed Image Text:Analysts look for red flags in financial statements that may signal financial trouble. Which of the following is a red flag that suggests that a company may be in trouble? a decrease in days' sales in receivables from year to year net cash provided by operating activities is consistently lower than net income a reduction in the debt ratio a decline in days' sales in inventory
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