State whether the following statements are true or false with brief reasons: Top-line sales growth can conceal a lot of problems.

True. While top-line sales growth (increase in revenue) is often seen as a positive indicator, it can indeed conceal underlying problems. For example, sales might be growing due to aggressive pricing strategies that erode profit margins, increased selling expenses, or relaxed credit policies leading to higher receivables and bad debts. Without corresponding growth in profitability (bottom-line) or efficient management of expenses and working capital, rapid sales growth can lead to cash flow issues, increased debt, and ultimately, financial distress. It is crucial to analyze sales growth in conjunction with profitability, efficiency, and liquidity metrics.