Which of the following are considered red flags of a company

Which of the following are considered red flags of a company when analyzing its financial statements (check all that apply) A. Having a net income lower than cash flow from operating activities B. Net income decreasing significantly over several years C. Days\' sales of receivables keeps growing D. A debt ratio much lower than the industry average

Solution

Two points are considered as red flags of a company:

b) Net income decreasing significantly over serveral years

c) Days sales of receivables keeps growing