Debt to total assets ratio is used primarily to assess which of the following?

The debt to total assets ratio is a key financial metric used to evaluate a company's financial leverage and risk. This ratio provides insight into the proportion of a company's assets that are financed by debt. By measuring the extent to which a company relies on borrowed funds, stakeholders can determine how much financial risk the company carries. A higher ratio indicates greater leverage, suggesting that a larger portion of the company's assets are funded through debt, which can increase the risk of insolvency if the company faces financial difficulties.

This assessment is crucial because it helps investors, creditors, and analysts understand the company's capital structure and its ability to meet long-term obligations. In contrast, other financial ratios focus on different aspects of a company's performance—such as operational efficiency, liquidity, or profitability—which do not provide specific insights into the leverage and risk associated with debt financing. Thus, the primary focus of the debt to total assets ratio lies in evaluating financial leverage and associated risk.