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

Question

Quizplus · Accepted Answer

A buildup of inventories may suggest that the company is not selling its products and may be experiencing a decline in demand. This can ultimately lead to financial trouble as the company's revenue may decrease while its inventory costs increase.

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