"Analysts Look for Red Flags in Financial Statements That May

question 27

Multiple Choice

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

• A)a decline in days' sales in inventory
• B)a decrease in dividend payout ratio from year to year
• C)a reduction in the debt ratio
• D)net cash flow from operating activities is consistently lower than net income

---

Definitions:

Calendar Entries

Items or records entered into a calendar to mark and organize dates and events, facilitating time management and scheduling.

Message Area

A part of a user interface designed to display messages or feedback to the user, such as error messages or notifications.

Greeting Line

A phrase or sentence used at the beginning of a letter or email to address or express friendliness towards the recipient.

Signature Line(s)

Digital or physical lines in a document where individuals sign to indicate agreement or acknowledgment.