Halal Berhads comparative financial statements for the years ending 31 December 2020, and 2019, are as follows. Halal Berhads common stock market price was RM35 on 31 December 2020 and RM40 on 31 December 2019.

Halal Berhad Statement of Profit or Loss and Other Comprehensive Income For the years ended 31 December 2020 and 2019

	2020 (RM000)	2019 (RM000)
Sales	1,200	1,000
Cost of goods sold	500	475
Gross Profit	700	525
Selling expenses	240	200
Administrative expenses	180	150
Total operating expenses	420	350
Income from operations	280	175
Other income	166	225
	446	400
Other expense (interest)	66	60
Income before income tax	380	340
Income tax expense	80	60
Net income	300	280

Halal Berhad Statement of Financial Position As at 31 December 2020 and 2019

	2020 (RM000)	2019 (RM000)
Assets
Current Assets
Cash	450	400
Marketable Securities	300	260
Accounts receivable (net)	130	110
Inventories	67	58
Prepaid Expenses	153	139
Total Current Assets	1100	967
Long-term investments	2350	2200
Property, plant, and equipment (net)	1320	1188
Total Assets	4770	4355
Liabilities
Current Liabilities	440	400
Long-term Liabilities
Mortgage note payable, 8% due 2025	100	0
Bonds payable, 5%, due 2021	1000	1000
Total long-term liabilities	1100	1000
Total liabilities	1540	1400
Stockholders Equity
Preferred RM0.75 stock, RM10 par	200	200
Common stock, RM10 par	100	100
Retained earnings	2930	2655
Total stockholders equity	3230	2955
Total liabilities and stockholders equity	4770	4355

REQUIRED:

The Ratio of fixed assets to long-term liabilities for Halal Berhad in 2020 and 2019 is 1.20 and 1.19 respectively, which can be interpreted as:

Select one:

A.

an increase from 1.19 to 1.20 indicates a better ability of Halal Berhad to pay off its long-term liabilities in 2020 by 1.0%.

B.

an increase from 1.19 to 1.20 indicates a better ability of Halal Berhad to pay off its long-term liabilities in 2020 by 0.9%.

C.

an increase from 1.19 to 1.20 indicates a better ability of Halal Berhad to pay off its long-term liabilities in 2020 by 0.7%.

D.

an increase from 1.19 to 1.20 indicates a better ability of Halal Berhad to pay off its long-term liabilities in 2020 by 0.8%.