As we all know the Cash Flow Statement (CFS) shows the movement of cash in and from the company in a current period. However we need to have some eye for detail to check if there is anything unusual going on with the business.
Let's see how.
Step 1: Take the sales figures for 5-7 years period.
Tip: Check for Bad debts in the Profit & Loss statement. If this number is increasing then it is a red flag that company is extending credit to bogus or untrustworthy customers.