Leiminster Co Which of the Following Would Be the Most Appropriate About

Multiple Choice

Leiminster Co.is analyzing the solvency of Acme Manufacturing and has collected the following data: $$\begin{array} { l l l r } & \mathbf { 2 0 1 5 } & \mathbf { 2 0 1 4 } & \mathbf { 2 0 1 3 } \\\text { Total debt } & \$ 2,000 & \$ 1,900 & \$ 1,750 \\\text { Total equity } & \$ 4,000 & \$ 4,500 & \$ 5,000\end{array}$$ Which of the following would be the most appropriate about Acme?

A) The company is becoming increasingly less solvent, as evidenced by the increase in its debt-to-equity ratio from 0.35 to 0.50 from 2013 to 2015.
B) The company is becoming less liquid, as evidenced by the increase in its debt-to equity ratio from 0.35 to 0.50 from 2013 to 2015.
C) The company is becoming increasingly more liquid, as evidenced by the increase in its debt-to-equity ratio from 0.35 to 0.50 from 2013 to 2015.
D) The company is becoming more risky as equity investment has declined by $1,000 or 20% from 2013 to 2015.