All of the Following Are Red Flags That a Company

question 106

Multiple Choice

All of the following are red flags that a company is in financial trouble except

• A)Buildup of inventories
• B)A current ratio close to 2.0
• C)Too much debt
• D)Decreased cash flow

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Definitions:

Life Insurance Reserves

Financial reserves that life insurance companies set aside to ensure they can meet future policyholder claims and obligations.

Financial Assets

Resources that are financial in nature, owned by individuals or businesses, which include stocks, bonds, cash, and bank deposits.

Corporate Equity

Represents the value of ownership interest in a corporation, divided among individual shareholders in the form of stocks.

Life Insurance Reserves

Financial reserves that life insurance companies must hold to ensure they can meet future policyholder obligations.