When analyzing financial statements, what can you conclude

1. When analyzing financial statements, what can you conclude when the accounts payable turnover ratio is 9.0 and the industry average is 12.0? _______________________________________________________________________________________________________

2. When analyzing the Statement of Cash Flows, what can you conclude when there is a negative cash flow from operations, positive cash flow from investing (sale of fixed assets) and a positive cash flow from financing (borrowing from banks)_____________________________________________________________________________________________________________

3. When analyzing financial statements, besides reviewing data year over year for comparisons, the analyst should also compare the data to_________________________________________

4. Give an example of “separation of duties “ in the accounting department of a small business _________________________________________________________________________________________________________________

5. Explain the meaning of “rationalization” with respect to internal control and the Fraud Triangle ________________________________________________________________________________________________________________