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Rio Imports Information from the Financial Statements Are Provided Below

Question 91

Multiple Choice

Rio Imports Information from the financial statements are provided below:
20152014 Current Liabilities $460,000$320,000 Long-Term Liabilities 240,000640,000 Stockholders’ Equity 840,0001,080,000 Net Cash Flows from Operating Activities 160,000102,000 Interest and Principal Payments 24,00016,000 Net Sales 950,000900,000 Net Income 180,000144,000 Interest Expense17,00023,000 Income Taxes 32,00029,000 Dividends Paid to Common Stockholders 30,00060,000\begin{array}{lll} & \underline { 2015 } & \underline { 2014 }\\\text { Current Liabilities } &\$ 460,000 & \$ 320,000 \\\text { Long-Term Liabilities } &240,000 & 640,000 \\\text { Stockholders' Equity } &840,000 & 1,080,000 \\\text { Net Cash Flows from Operating Activities } &160,000 & 102,000 \\\text { Interest and Principal Payments } &24,000 & 16,000 \\\text { Net Sales } &950,000 & 900,000 \\\text { Net Income } &180,000 & 144,000 \\\text { Interest Expense} &17,000 & 23,000 \\\text { Income Taxes } &32,000 & 29,000 \\\text { Dividends Paid to Common Stockholders } &30,000 & 60,000\end{array}
-Refer to Rio Imports.The debt-to-equity ratio for 2015 is


A) an indicator that the company's ability to meet current interest payments to creditors is increasing.
B) increasing slightly from 2014 to 2015.
C) an indicator that for every $1 of capital that has been provided by stockholders,creditors provided $0.83.
D) an indicator that the company's reliance on stockholders for funding increased from 2014 to 2015.

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