kashifafridi

Symptoms of overtrading
1. A fall in liquidity ratios
2. A rapid increase in revenue
3. A sharp increase in the sales to non-current assets ratio (fixed asset
turnover)
4. An increase in inventory in relation to revenue
5. An increase in receivables
6. Increase in the accounts payable period
7. An increase in short-term borrowing and a decline in cash balances
8. An increase in gearing
9. A decrease in the profit margin

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