An analyst is evaluating the solvency and liquidity of Apex Manufacturing and has collected the following data (in millions of euro):
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which of the following would be the analyst rsquo s most likely conclusion 609706
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FY4 |
FY3 |
|
|
Total debt |
€2,000 |
€1,900 |
€1,750 |
|
Total equity |
€4,000 |
€4,500 |
€5,000 |
Which of the following would be the analyst’s most likely conclusion?
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 FY3 to FY5.
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 FY3 to FY5.
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 FY3 to FY5.
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