An analyst observes the following data for two companies:

Which of the following choices best describes reasonable conclusions that the analyst might make about the two companies’ abilities to pay their current and long-term obligations?
A. Company A’s current ratio of 4.0 indicates it is more liquid than Company B, whose current ratio is only 1.2, but Company B is more solvent, as indicated by its lower debt-to-equity ratio.
B. Company A’s current ratio of 0.25 indicates it is less liquid than Company B, whose current ratio is 0.83, and Company A is also less solvent, as indicated by a debt-to equity ratio of 200 percent compared with Company B’s debt-to-equity ratio of only 30 percent.
C. Company A’s current ratio of 4.0 indicates it is more liquid than Company B, whose current ratio is only 1.2, and Company A is also more solvent, as indicated by a debt-to-equity ratio of 200 percent compared with Company B’s debt-to-equity ratio of only 30 percent.

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Revenue Net income Current assets Total assets Current liabilities Total debt Shareholders' equity Company A ($) 4,500 50 40,000 100,000 10,000 60,000 30,000 Company B ($) 6,000 1,000 60,000 700,000 50,000 150,000 500,000