42. You are evaluating the solvency and liquidity of XYZ Co. in light of the following information: FY 2017 FY 2016 FY 2015 Total Debt $2000 $1900 $1750 Total Equity $4000 $4500 $5000 Your MOST LIKELY conclusion is that: a. The company is becoming less solvent b. The company is becoming less liquid c. The company is becoming more solvent d. The company is becoming more liquid 43. Using the same information as for Question #42, what is the MOST REASONABLY PROBABLE explanation for the financial data? a. The decrease in equity is the result of the decline in the market value of the company's stock. b. The decrease in equity may be the result of recurring losses, payment of dividends greater than net income or repurchase of shares. c. The increase in total debt may mean the company has a higher credit rating in FY 2019 than in FY 2018. 44. Which of the following will MOST LIKELY motivate company managers to inflate earnings? a. The possibility of a bond covenant violation. b. Projected earnings in excess of analysts' forecasts. c. Projected earnings greater than those of the previous period.