Which of the following is a 'red flag' suggesting that a company may be in trouble?
A)A reduction in inventories
B)An increase in dividend payout
C)A decline in days in inventory
D)Cash flow from operations lower than profit

Question

Quizplus · Accepted Answer

Cash flow from operations lower than profit can indicate that a company is not generating enough cash to sustain its operations, which may result in cash flow problems and potential financial difficulties. A reduction in inventories could potentially be a positive sign of more efficient inventory management, an increase in dividend payout may reflect a company's strong financial position and a decline in days in inventory could also be a positive sign of improved inventory management.

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