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One step in assessing the quality of earnings is to look for red flags. An example of a red flag is a significant increase in
One step in assessing the quality of earnings is to look for red flags. An example of a red flag is a significant increase in accounts receivable without commensurate growth in sales (i.e., accounts receivable turnover decreases). List five other red flags the astute analyst might look for, describe why it is a red flag, and identify where the analyst might find this information.
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