Financial statements for Narlock Company appear below:

NarlockCompany

Balance Sheet

December $31,20$X$6$ and $20$X$5($dollars in thousands$)$

$20$X$620$X$5$

Current assets:

Cash and marketable securities $$120$ $$120$

Accounts receivable, net $150150$

Inventory $130120$

Prepaid expenses $9080$

Total current assets $490470$

Noncurrent assets:

Plant & equipment, net $1,6701,600$

Total assets $$2,160$ $$2,070$

Current liabilities:

Accounts payable $$100$ $$100$

Accrued liabilities $6070$

Notes payable, short term $250290$

Total current liabilities $410460$

Noncurrent liabilities:

Bonds payable $480500$

Total liabilities $890960$

Shareholders' equity:

Preferred shares, $$10$ par, $6\%100100$

Common shares, $$2$ par $200200$

Additional paid$-$in capital$--$common shares $150150$

Retained earnings $820660$

Total shareholders' equity $1,2701,110$

Total liabilities & shareholders' equity $$2,160$ $$2,070$

NarlockCompany

Income Statement

for the Year Ended December $31,20$X$6($dollars in thousands$)$

Sales $($all on account$)$ $$2,250$

Cost of goods sold $1,570$

Gross margin $680$

Operating expenses $270$

Net operating income $410$

Interest expense $50$

Net income before taxes $360$

Income taxes $(30\%)108$

Net income $$252$

Narlock Company's debt$-$to$-$equity ratio at the end of $20\backslash$times $6$ was closest to:

Multiple Choice

$0\mathrm{.}70$ to $1.$

$0\mathrm{.}32$ to $1.$

$0\mathrm{.}38$ to $1.$

$1\mathrm{.}09$ to $1.$