Analysts Look for Red Flags in Financial Statements That May

question 114

Multiple Choice

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)a significant increase in net income for several years in a row
• B)a consistent movement in sales,merchandise inventory,and accounts receivable
• C)a reduction in the debt ratio
• D)operating activities as is a major source of cash flows

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Definitions:

Freedom

The condition or right of being able or allowed to do, say, think, or pursue life activities without undue restraint or oppression; it is a fundamental human right and a cornerstone of democratic societies.

Frederick Douglass

An African American social reformer, abolitionist, orator, writer, and statesman who after escaping from slavery in Maryland, became a leader of the abolitionist movement.

Military Service

The act of serving in the armed forces of a country, either voluntarily or through conscription.

Enlist

To voluntarily join a military force.