Which of the following is a warning sign of problems in managing cash flows?
A)Proceeds of borrowing that are continually greater than repayments of borrowings
B)Dividends paid to shareholders that are greater than profit
C)Cash flow from operating activities that is significantly lower than profit
D)All of the above

Question

Quizplus · Accepted Answer

All of the given options are warning signs of problems in managing cash flows. A continuous increase in borrowings without adequate repayment can result in a debt trap, dividends that exceed profits can lead to a depletion of cash reserves, and a significant disparity between cash flow from operating activities and profit can indicate that the company is not generating cash from its core operations.

Which of the Following Is a Warning Sign of Problems