Read the following information and answer the question: "If we take a close look at the balance sheets of the previous five years, it shows that the amount of loans taken by the company against fixed assets has only increased, the result of which is poor financial health of the company this year. Financial report of Company B." Which of the following can be inferred from the statement of the financial report of Company B?

None can be inferred
Both A and D
Both A and C
Only D

Correct answer: Both A and C

Solution

The report explicitly indicates that examining balance sheets over five years reveals the company's financial health, so statement C can be inferred. It also suggests that reducing loans against fixed assets would likely improve financial health, so A is a reasonable inference. Statements B and D go beyond the given information.

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