overtrading

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February 16, 2021 at 4:18 pm #610637
adarsh1997
Participant
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Hello John,

Which of the following may indicate overtrading?
A Significant new issues of long-term finance
B Rising profits but falling margins
C Rising receivables turnover
D Falling revenues

1. The answer is B.
2. Why C could not be the answer?

Thanks
February 16, 2021 at 6:22 pm #610658
John Moffat
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It could be an indicator, but it could be due to other reasons as well 🙂

B is the most likely indicator.
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