Based on the following information from ABC Company's financial analysis, which one of the following statements is NOT true? Ratio year1 year2 year3 year4 year5 Debt to equi 0.05 0.05 0.01 0.01 0.01 Net profit ratio 15.9% 18.6% 17.5% 19.6% 21.3% payable turnover ratio 9.75 10.63 11.24 13.15 13.52 Inventory turnover ratio 6.31 5.76 7.28 10.53 15.36 Gross profit ratio 58.3% 52.3% 46.9% 49.5% 41.3% Net profit ratio 13.2% 15.2% 14.1% 15.9% 16.4% Current ratio 7.35 4.96 3.28 2.65 3.14 A. The cost of goods sold has been increasing over the five years. B. The company has very little debt and may be underleveraged. C. The company's ability to cover its short-term obligations is getting higher over the five years. D. The company is selling their inventory faster over the five years.
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The cost of goods sold has been increasing over the five years. (Not enough information to confirm) B. The company has very little debt and may be underleveraged. (True) C. The company's ability to cover its Show more…
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