Discuss three ways that management might manipulate

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Using the following rations (Debt and equity; Current ratio; Cash flow and current maturities of long-term debt; Fixed charge coverage; Net profit margin after tax; Times interest earned; Net profit margin before tax; Degree of financial leverage; Inventory turnover in days; or Accounts receivable turnover in days) choose three or four that creditors would mostly likely use to make their lending decisions. Indicate a rationale for choosing each ratio.

Question 1: Discuss at least three ways that management might manipulate the financial data to guarantee that the lending decision will be made in its favor. Provide specific examples.

Reference no: EM132597384

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