Rio Imports Information from the Financial Statements Are Provided Below

question 12

Multiple Choice

Rio Imports Information from the financial statements are provided below:
$\begin{array}{lll} & \underline { 2015 } & \underline { 2014 }\\\text { Current Liabilities } &\$ 460,000 & \$ 320,000 \\\text { Long-Term Liabilities } &240,000 & 640,000 \\\text { Stockholders' Equity } &840,000 & 1,080,000 \\\text { Net Cash Flows from Operating Activities } &160,000 & 102,000 \\\text { Interest and Principal Payments } &24,000 & 16,000 \\\text { Net Sales } &950,000 & 900,000 \\\text { Net Income } &180,000 & 144,000 \\\text { Interest Expense} &17,000 & 23,000 \\\text { Income Taxes } &32,000 & 29,000 \\\text { Dividends Paid to Common Stockholders } &30,000 & 60,000\end{array}$
-Refer to Rio Imports.The debt-to-equity ratio for 2015 is

• A)an indicator that the company's ability to meet current interest payments to creditors is increasing.
• B)increasing slightly from 2014 to 2015.
• C)an indicator that for every $1 of capital that has been provided by stockholders,creditors provided $0.83.
• D)an indicator that the company's reliance on stockholders for funding increased from 2014 to 2015.