medium · Corporate Credit Analysis
A company's CFO is consistently lower than its Net Income. Which of the following is the most likely 'Red Flag' for a credit analyst regarding Quality of Earnings?
- Low levels of intangible assets on the balance sheet
- Frequent use of debt to finance share buybacks
- Persistent growth in Accounts Receivable that outpaces revenue growth
- A high proportion of Depreciation and Amortization relative to Capex
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