hard · Financial Accounting financial-statement-analysis-ratios
If a company has an 'Operating Margin' that is increasing while its 'Cash Flow Conversion' (CFO / EBITDA) is decreasing, what might an analyst suspect?
- The company is engaging in aggressive revenue recognition or building up inventory.
- The company has recently decreased its dividend payout ratio.
- The company's effective tax rate has decreased.
- The company is successfully reducing its fixed costs.
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