All of the Following Are Red Flags to Look for When

question 63

Multiple Choice

All of the following are red flags to look for when analyzing financial statements,except:

• A) sales, receivables and inventory not moving in the same direction
• B) inventory turnover is high
• C) high debt ratio
• D) days sales in receivables growing faster than for other companies in the industry

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Definitions:

Economic Growth

is an increase in the production of goods and services in an economy over a period of time, often measured by GDP.

Entrepreneurial Ability

is the skill set and initiative to start, manage, and succeed in a new business venture or enterprise.

Resources

refer to assets, materials, or inputs used to produce goods and services, including natural resources, human skills, and capital.

Production Possibilities Curve

A graph that shows the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently utilized.