Three years of statements of financial position for a very profitable furniture manufacturer at its seasonal low point of accounts receivable and inventory are as follows:

Which of the following most accurately describes the company's capital structure? A. The companys leverage is fairly stable, though rising, and about half of the short-term debt should be replaced by long-term debt since the company is at its seasonal low point. B. The companys leverage is fairly stable, though rising slightly, and most, if not all, of the short-term debt should be replaced by long-term sources since the company is at its seasonal low point. C. The companys leverage has improved since 20Y1, and the distribution of short and long-term debt is about right since it is fairly equal. D. The companys leverage is fluctuating and the distribution of short and long-term debt is about right, even though the company appears unable to clean up its line of credit

*Apparently, A and D are false.*

(in $000s) 2041 2042 2043 Cash $ 42 $ 62 $ 51 Accounts receivable 28 44 135 Inventory 173 210 317 Total current assets 243 316 503 Patents & trademarks 6 2 7 Total non-current assets 71 77 94 Total assets $ 314 $ 393 $ 597 Short-term debt $ 85 $ 103 $ 177 Current portion LTD 4 4 4 Accounts payable 51 65 104 Accrued expenses 34 42 75 Other current liabilities 3 5 5 7 Total current liabilities 177 219 368 Long-term debt 12 8 8 4 Total liabilities 189 227 372 Owners equity 125 166 225 Total liabilities and equity $ 314 $393 $ 597 Total liabilities to Tangible net worth 1.5 1.4 1.7