Which of the following is a "red flag" suggesting that a company may be in trouble?
A) Inconsistent movements among sales, inventory, and receivables
B) A reduction in the debt ratio
C) A decrease in inventory levels
D) Cash flow from operations is higher than net income

Question

Quizplus · Accepted Answer

Inconsistent movements among sales, inventory, and receivables may indicate that the company is struggling to manage its cash flow and inventory levels efficiently. This can be a sign of financial difficulties and may indicate that the company is in trouble.

Which of the Following Is a "Red Flag" Suggesting That