An analyst is evaluating the solvency and liquidity of Apex Manufacturing and has collected the following data (in millions of euro):

FY5

FY4

FY3

Total debt

€2,000

€1,900

€1,750

Total equity

€4,000

€4,500

€5,000

Which of the following would be the analyst’s most likely conclusion?

A. The company is becoming increasingly less solvent, as evidenced by the increase in its debt-to-equity ratio from 0.35 to 0.50 from FY3 to FY5.

B. The company is becoming less liquid, as evidenced by the increase in its debt-to-equity ratio from 0.35 to 0.50 from FY3 to FY5.

C. The company is becoming increasingly more liquid, as evidenced by the increase in its debt-to-equity ratio from 0.35 to 0.50 from FY3 to FY5.