Which of the Following Would Be a Red Flag in a Financial

question 111

Multiple Choice

Which of the following would be a red flag in a financial statement analysis?

• A) High debt ratio
• B) High inventory turnover
• C) High current ratio
• D) High earnings per share
• E) Cash flow higher than net income

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Definitions:

Revenue

The total amount of income generated by the sale of goods or services related to a company's primary operations.

MIRR

Modified Internal Rate of Return, a financial metric that addresses some of the limitations of the traditional internal rate of return by taking into account different financing and reinvestment rates.

Mutually Exclusive

Conditions or options that cannot occur or be chosen at the same time, requiring a choice to be made between them.

Internal Rate

Often refers to the internal rate of return (IRR), a metric used in capital budgeting to estimate the profitability of investments.