Question $(4)$

Directions: Click the Case Link above and use the information provided in Howard Supply, Inc, Part B$,$ to answer this question:

What is the trend in Howard's leverage and capital structure for the three years provided in the financial statements? $($Carry your calculation to two decimal places.$)$

Debt to equity is improving over the three$-$year period due to the paydown of long$-$term debt.

Debt to equity is stable over the three$-$year period as increased notes payable have offset

retention of all earnings.

Debt to equity is deteriorating over the three$-$year period due to higher debt levels and dividends.