Question
A large NBFC reported an increase in operating profit
over the last year. However, its cash flow from operations was negative due to a sharp rise in receivables and a decrease in payables. Analysts are questioning the firm’s liquidity and sustainability. Which tool would be most relevant in identifying such a red flag?Solution
The Cash Flow Statement reveals actual cash movement and highlights discrepancies between accounting profit and real liquidity, exposing operational stress not visible in profit figures.
More Financial Statement Analysis Questions
- What approximate value will come in place of the question mark (?) in the following question? (Note: You are not expected to calculate the exact value.)
18.22 × 11.99 + 154.15 = ?
(20.23% of 780.31) + ? + (29.87% of 89.87) = 283
2875.45 + ? – 2762.19 = 2145.72 – 1956.63
13.99% of 399.99 ÷ 28.17 = ? ÷ 25.15
Approximate the value of (19.98 × 5.02) ÷ 0.99
(8.013 – 25.04) = ? + 11.98% of 2399.98
(14.98% of 319.99) - 7.998 = √?
20.22 × 11.99 + 140.15 = ?
- What approximate value will come in place of the question mark (?) in the following question? (Note: You are not expected to calculate the exact value.)
