Probably the most valuable to look out for, in terms of an indicator, are revenue trends. Either unusual or unexplained trends in revenues may indicate trouble.A meteoric and high rise in revenue that does not correlate with rises in costs and market demand may also indicate inflated sales figures on the part of the company.
Declining revenues that cannot be explained through external market or industry conditions also is something of a red flag. A company may mask financial distress by reporting top-line growth, but if such growth cannot be explained by anything such as the introduction of a new product or expansion into a new market, it raises red flags.