some red flags

1. if a firm regularly takes out more than half of the actual costs to get "adjusted" earnings, that is a big red flag, especially if it is amortisation of goodwill, and they appear to want to create value with aquisitions
2. they have slightly off key job titles, especially if its an engineering firm.
3. very low shareholdings in the firm by the ceo and cfo, ie less than one years salary.
4. low cash conversion on sales
5. boastful and unrepresentative patter in the annual report, boasting about growing sales, when they've bought a business, and margins have declined, while paying themselves more; outrageous.