Response to the following questions:
1. One of the ratios used to indicate long-term debt-paying ability compares total liabilities to total assets What is the intent of this ratio? How precise is this ratio in achieving its intent?
2. For a given firm, would you expect the debt ratio to be as high as the debt/equity ratio? Explain.
3. Explain how the debt/equity ratio indicates the same relative long-term debt-paying ability as does the debt ratio, only in a different form.
Support your answers using a minimum of two professional or academic sources.