CASH FLOW STATEMENT ANALYSIS: IDENTIFYING RED FLAGS AND WARNING SIGNS FOR FINANCIAL DISTRESS

Abstract

This paper focuses on the importance of cash flow statement analysis in identifying red flags and warning signs for financial distress in companies. The cash flow statement provides valuable insights into a company's cash generation, liquidity, and financial health. By examining key components of the cash flow statement, such as operating cash flows, investing activities, and financing activities, analysts can identify patterns and indicators that may suggest potential financial distress. This paper discusses common red flags and warning signs to look out for during cash flow statement analysis and emphasizes the significance of early detection and proactive measures in mitigating financial distress.