Question
Inventory is increasing faster than sales. What is the most likely balance-sheet concern?
Tap to flip
Answer
Potential obsolescence or overstated inventory.
Tap to flip back
Question
An IFRS company classifies interest paid in CFF instead of CFO. Why can this distort earnings-quality comparisons?
Tap to flip
Answer
CFO appears stronger without better operations.
Tap to flip back
Question
A company consistently reports positive CFF year after year to support operations. What is the likely concern?
Tap to flip
Answer
Reliance on external financing.
Tap to flip back
Question
Management sells receivables through operating securitization to improve reported operating cash flow. What concern should an analyst flag?
Tap to flip
Answer
Cash flow presentation may be managed to look stronger.
Tap to flip back