An analyst is evaluating the solvency and liquidity of XYZ Manufacturing and has collected the following data (Total debt: Y1: 1750, Y2: 1700, y3: 2000). (Total equity: Y1: 5000, Y2: 4500, y3: 4000). Which of the following would be the analysts least likely conclusion?

Select one:

a. The company is becoming more solvent, as evidenced by the increase in its debt-to- equity ratio from 0.35 to 0.50 from Y1 to Y3.

b. 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 Y1 to Y3.

c. The company is becoming increasingly less liquid, as evidenced by the increase in its debt-to- equity ratio from 0.35 to 0.50 from FY3 to FY5.