The companys leverage is steadily increasing. Which of the following is the best explanation?

A. The companys narrower net profit margins in the past 2 years, coupled with a high dividend-payout ratio, prevent its net worth from remaining proportionate to its increasing liabilities. B. The company is repaying its long-term debt more slowly than its net worth is increasing. C. Most of the companys liability growth is in accounts payable, which outpaced net profit margins even though they improved. D. A disproportionately high amount of the companys debt is short-term.

Dealer's Choice Statements of Financial Position (in $000s) As At December 31: 20Y3 2012 2011 $ $ 231 306 924 $ 204 524 576 ASSETS Current assets Cash Accounts receivable Inventory Raw materials Work in process Finished goods Total inventory Total current assets 341 239 281 232 76 589 1,819 86 170 105 86 361 1,089 666 1,473 Fixed assets Gross fixed assets Less: Accumulated depreciation Net fixed assets 679 97 582 703 79 624 681 69 612 Other noncurrent assets 20 0 14 TOTAL ASSETS $ 2,421 $ 2,097 $ 1,715 $ $ $ LIABILITIES AND EQUITY Current liabilities Line of credit Current portionLTD Accounts payable Accrued expenses Other current liabilities Total current liabilities 270 19 1,033 268 255 19 814 187 5 1,280 225 19 531 135 11 12 1,601 922 Long-term debt 142 149 155 Other noncurrent liabilities 3 3 3 Owners' equity 675 665 635 TOTAL LIABILITIES AND EQUITY $ 2,421 $ 2,097 $ 1,715 Dealer's Choice Statements of Comprehensive Income (in $000s) Years Ended December 31: 2083 2012 2011 $ Sales Cost of goods sold Gross profit $ 7,990 6,308 1,682 $ 7,486 6,357 1,129 6,495 5,453 1,042 Selling general, and administrative expense Depreciation expense Total SG&A expenses 1,377 26 1,403 859 24 883 758 18 776 Interest expense Loss on sale of fixed assets Other expenses Income before taxes 80 7 22 170 75 0 4 167 50 0 0 216 Taxation 82 81 102 Net income $ 88 $ 86 $ 114 Owners' drawings 78 56 100 Retained earnings $ 10 $ 30 $ 14 4/5