Analysts Look for Red Flags in Financial Statements That May

question 166

Multiple Choice

Analysts look for red flags in financial statements that may signal financial trouble.Which of the following is a red flag that suggests 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

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Definitions:

Diploid

The condition of having two sets of chromosomes per nucleus. Compare with haploid and polyploid.

Nucleic Acids

Biomolecules essential for life, including DNA and RNA, that carry genetic information and are involved in protein synthesis.

Amino Acids

Organic compounds that serve as the building blocks of proteins, containing both an amino group and a carboxyl group.

Three-Letter Sequences

In genetics, sequences of three nucleotides (triplets) in DNA or RNA that code for specific amino acids, the building blocks of proteins.