According to conventional wisdom among financial analysts, a high debt/equity ratio indicates a high risk of insolvency or ultimate bankruptcy; conversely, a low debt/equity ratio indicates that the company is relatively solvent and able to meet its long-term obligations. Please see PowerPoints 59 and 60 in chapter 3 (copied below).

In the case of Apple, their debt/equity ratio actually increased from 2002 to 2020. In other words, Apple carries more debt today relative to its equity than it did in 2002. However, very few people would argue that Apple is a riskier company today than in 2002. Please make an argument, supported by data, for why Apple is at least as solvent today as it was in 2002, despite its much higher debt/equity ratio. The argument should not just be supported by data, but you also need to provide either an additional keen insight (addressed to an accounting/finance professional) or do an excellent job explaining the concept to an audience member who is not an accounting/finance professional.

To whom did you address the answer above, to a professional or non-professional?[1]

[1] To whom did you address the answer above, to a professional or non-professional? Depending on your answer I will grade the above answer differently. If it was addressed to a professional, I expect a unique insight. If it was addressed to a non-professional, I expect extreme clarity in explaining a complicated financial topic to a non-professional. It is more likely you will earn maximum points if you address to a professional, but it is easier to earn 3.4 points if you do a good job addressing to a non-professional.