Red flags in financial statement analysis can include all of the following EXCEPT:
A)a debt ratio higher than average.
B)a slowdown in inventory turnover.
C)days' sales in receivables increasing.
D)Net Cash Provided by Operating Activities exceeds net income.

Question

Quizplus · Accepted Answer

Net Cash Provided by Operating Activities exceeding net income is not a red flag, as it indicates that the company is generating more cash than what is being reported in the income statement. The other answer choices are red flags, indicating potential financial issues that require further analysis.

Red Flags in Financial Statement Analysis Can Include All of the Following