Imagine you've just stepped into the shoes of a top financial detective! Your latest case? Unraveling the enigmatic story behind the numbers of Slater Inc., a trendy retail powerhouse making waves in the sultry southeastern U.S.

Here's the puzzle: Slater's financial statements show a gleaming increase in net income. But wait! Dive deeper, and something seems amiss. The stream of operating cash is drying up, trickling down each year.

Your detective instincts kick in, and you discover two perplexing clues:

• The company's accounts receivable have been piling up like unsolved cases on a detective's desk.
• Their inventory is growing faster than kudzu in a southern summer!

Challenge Time!

What secrets do these clues reveal about the quality of Slater's earnings? Put on your detective hat and share your theories with supporting evidence! Reference please