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Financial Analysis: Interpret warning signs
Ratios are useless if you can't read them. This case teaches you to spot red flags.
Corporate FinanceIntermediateQCM
You are analyzing **RetailCo**, a listed retail chain. Here is the 3-year evolution:
| | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | €800M | €850M | €920M |
| Gross margin | 42% | 38% | 34% |
| EBITDA | €80M | €68M | €55M |
| WCR (days revenue) | 45d | 62d | 85d |
| Net debt/EBITDA | 1.5x | 2.8x | 4.2x |
Management states: "*Our 15% growth proves business strength.*"
Question 1/3
Management is right: revenue growth is a positive signal.
0/3
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