Prairie Manufacturing Ltd. reported total liabilities of $1,…
Prairie Manufacturing Ltd. reported total liabilities of $1,200,000 and total assets of $3,000,000 in 2025. In 2026, the company reported total liabilities of $2,100,000 and total assets of $3,000,000. A lender reviewing the company’s financial position notes the change in the debt-to-assets ratio between 2025 and 2026. Which conclusion is most appropriate?
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