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You are working as a loan officer at a local bank. Earlier today, a former high-school classmate came in to see you about a loan

You are working as a loan officer at a local bank. Earlier today, a former high-school classmate came in to see you about a loan for the familys retail business. After looking over the stores financial statements, you notice that the store is posting a strong net income growth. However, these statements also reveal that the store has had a negative cash flow for the last two years and that account receivables have almost doubled over the same time span. Should this concern you?

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