Allegations have recently been made by the media that the financial statements published by Yapa Tubes Company for the year ended 2015 are fraudulent. A horizontal analysis of the Balance Sheet and Income Statement for Yapa Tubes Company for the years 2015 and 2014 reveal the following changes in the financial position and performance of the company: Balance Sheet 2015 2014 Change % Change Cash Debtors Inventory Total Assets $ 300 480 730 1,510 $ 460 620 1,000 2,080 -160 -140 -270 -570 -34.78% -22.58% -27.00% -27.40% Creditors Loan Paid-up capital Retained earnings Total liabilities and shareholders' funds 310 100 400 700 1,510 580 500 400 600 2,080 -270 -400 0 100 -570 -46.55% -80.00% 0.00% 16.67% -27.40% 840 160 680 550 120 430 290 40 250 52.73% 33.33% 58.14% Income Statement Sales Cost of goods sold Gross profit Operating expenses: Wages Storage costs Advertising Taxes and other charges Total expenses Profit 150 120 90 75 100 80 60 45 50 40 30 30 50.00% 50.00% 50.00% 66.67% 52.63% 68.97% 435 245 285 145 150 100 Question: Identify and explain four possible red flags using ratio analysis, together with the above horizontal analysis, of the financial statements of Yapa Tubes for 2015