Tom and Jane Have Been Reviewing Their Financial Statements

Multiple Choice

Tom and Jane have been reviewing their financial statements.Using the following information,they have asked you to determine their debt safety ratio and advise them about assuming more debt in the future.

A) Tom and Jane have a manageable debt ratio and can assume more debt.
B) Tom and Jane have a debt ratio that is very low and can consider assuming more debt.
C) Tom and Jane have a debt ratio around the danger range and should wait before assuming more debt.
D) Tom and Jane have a debt ratio that is very high and should assume no more debt.
E) It is impossible to tell what they should do.