Given the following Year 12 Financial Statement data for a footwear company:

Given the following Year 12 Financial Statement data for a footwear company:

Income Statement Data

Year 12 (in 000s)

Net Revenues from Footwear Sales $ 300000

Operating Profit (Loss) 75000

Net Profit (Loss) $ 45500
Balance Sheet Data

Cash on Hand 10000

Total Current Assets $ 70000

Total Assets 320000

Overdraft Loan Payable 5000

1-Year Bank Loan Payable 12000

Current Portion of Long-term Loans 20000

Total Current Liabilities 58500

Long-Term Bank Loans Outstanding 100000

Shareholder Equity: Year 11 Balance Year 12 Change

Common Stock 10000 0 10000

Additional Capital 101000 0 101000

Retained Earnings 30000 20500 50500

Total Shareholder Equity 141000 +20500 161500
Other Financial Data

Depreciation $12500

Dividend payments $25000

Based on the above figures and the formula for calculating the default-risk ratio found on the Help screen for p. 5 of the Footwear Industry Report and p. 28
of the Player%u2019s Guide the company%u2019s default-risk ratio in Year 12 was

A. 1.65.

B. 0.89.

C. 0.77.

D. 1.03.

E. None of these.