Question
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 (that is, accounts receivable turnover decreases). List five other red flags an astute analyst might look for. Also, provide the reason for it being a red flag, and identify where the analyst might find this information.
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1 Debt t Equity rti signifint inrese in debt t equity rti is red flg s it shws tht the firm is tryin...Get Instant Access to Expert-Tailored Solutions
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Auditing a business risk appraoch
Authors: larry e. rittenberg, bradley j. schwieger, karla m. johnston
6th Edition
9780324645095, 324645090, 978-0324375589
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