Based on the following information from ABC Companys financial analysis, which one of the following statements is true?

Ratio Year 1 Year 2 Year 3 Year 4 Year 5 Gross profit ratio 35.7% 34.6% 36.9% 38.6% 41.5% Net profit ratio 11.7% 12.5% 14.9% 15.1% 18.3% PP&E turnover ratio 14.2 13.8 4.9 7.2 9.4 Current ratio 5.4 6.7 6.1 7.2 6.3 Debt to equity 1.5 1.3 0.8 0.7 0.4 Return on equity 12.6% 14.5% 14.1% 15.7% 16.2% Review Later The company's ability to cover its short-term obligations is getting higher over the five years. The company might have invested too much PP&E in year 3. The company's ability to cover its long-term debt is getting lower over the five years. The company has increased operating expenses over the five years.