Which of the following, when discovered through the use of analytical procedures, would indicate a relatively high risk of financial failure?
A) an increase in the balance in fixed assets
B) a decline in gross margin percentages
C) an increase in the ratio of allowance for uncollectible accounts to gross accounts receivable, while at the same time accounts receivable turnover decreases
D) a higher than normal ratio of long-term debt to net worth, as well as a lower than average ratio of profits to total assets
Correct Answer:
Verified
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