Financial Statements for Narumi Company Appear Below -Narumi Company's Debt-To-Equity Ratio at the End of Year 2

Multiple Choice

Financial statements for Narumi Company appear below:

$\begin{array}{|l|r|}\hline&\text {Larned Company } \\&\text { Income Statement } \\&\text { For the Year Ended December 31, Year } \\&2\\&\text { (dollars in thousands) }\\\hline \text { Sales (All on Account) } & \$ 2050 \\\hline \text { Costs of Goods Sold } & \$ 1430 \\\hline \text { Gross Margin } & \$ 620 \\\hline \text { Operating Expenses } & \$ 240 \\\hline \text { Net Operating Income } & \$ 380 \\\hline \text { Interest Expense } & \$ 50 \\\hline \text { Net Income before Taxes } & \$ 330 \\\hline \text { Income Taxes (30\%) } & \$ 99 \\\hline \text { Net Income } & \$ 231\\\hline \end{array}$



-Narumi Company's debt-to-equity ratio at the end of Year 2 was closest to which of the following?

A) 0.42 to 1.
B) 0.56 to 1.
C) 0.98 to 1.
D) 2.07 to 1.