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Q2. (30 marks) a. What are the cash flow signs of a healthy company? (5) b. What are some red flags to watch out for

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Q2. (30 marks) a. What are the cash flow signs of a healthy company? (5) b. What are some red flags to watch out for in financial statement analysis of a company? (10) C. What are some potential advantages and disadvantages of operating with a high leverage and debt ratio? (7) d. Explain why P/E ratio and EPS are used in determining health of a stock? Is it good to have a low EPS ratio? Why or why not? (8)

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