Which of the Following Is a Red Flag According to Schilit

question 20

Multiple Choice

Which of the following is a red flag according to Schilit?

• A) cash flow from operations drops below net income
• B) accounts receivable growing faster than sales
• C) fluctuating gross margins over time
• D) nepotism on the board of directors
• E) all of the above

---

Definitions:

Percentage Commission

A method of compensation where an employee or agent is paid a percentage of the sales they generate or the deals they close.

Intrinsic Rewards

The personal satisfaction and enjoyment derived from completing a task or achieving a goal, independent of external rewards or recognition.

Extrinsic Rewards

Rewards given to employees that are external to the job itself, such as pay, benefits, bonuses, and promotions, aimed at motivating employees' performance.

Internal Promotions

The practice of filling vacancies within an organization by promoting existing employees rather than hiring externally.