🔴 5 Red Flags in a Company

1. High Profit, No Cash
🧾 Profit looks great, but the cash flow is missing. Could mean aggressive revenue recognition, poor collections, or rising receivables.

2. Misuse of fund – e.g. Large Loans to Directors or Related Parties
💸 Money going out… but not to grow the business. This could be a sign of poor governance or future write-offs.

3. Inconsistent Revenue Sources
🎢 Every year, money comes from somewhere else. No stable business model = risky future.

4. No Clear CapEx or R&D Investment
🚫 No spending on new assets or innovation? The current profit may be eating into the future.5. Unusual One-Time Gains
🎯 Big profits from selling assets or revaluing investments can inflate results. But can they repeat it?

💬 Thinking of buying a business?
Don’t stop at the income statement.
At ORNA, we help you uncover the full picture.