How finance people come to know that a company is over-trading and building un-necessary stocks? Which tools do they use?

Observe for following conditions: Rapid growth in business development and sales.
Lesser net profit.
The business running a business with limited knowledge.
(Like banking company all of a sudden avenues a textile plant) Cash flow problem or short of working capital.
Bad cash budget or unrealistic.
Having large amount of unpaid vendors.
High amount of financial interest expenditure.
High gearing ratio.
Keen market competition.
Overstock or slow movement of inventory.

deatiled analysis is requried to know if company is overtrading or not.. but at first instance some ratio can provide a useful measure such as current ratio, sales increase % etc

Keep a tab on inventory and maintain a balanced figure to hold an average stock to ensure the company's risk appetite and should not make high speculation or hold over stock of any specific product.