Directions: Click the case link above and use the information provided in Revolutionary Designs, Part B, to answer this question: The companys leverage is steadily increasing. Which of the following is the best explanation?

The company is repaying its long-term debt more slowly than its net worth is increasing. Liabilities are growing faster than owners equity due to dividend payments and increases in accounts payable. The companys net profit margin is too narrow to permit it to maintain a constant leverage. Most of the companys liability growth is in current liabilities, which have a greater impact on leverage.

(Please provide me the correct answer with justification)