Final answer:
The debt to total assets ratio is used to assess a company's solvency and long-term debt-repayment capacity, not its liquidity or short-term debt-repayment ability. Therefore, the right choice is 'c) it is used to evaluate a company's solvency and long-term debt-paying ability.'
Step-by-step explanation:
The correct statement about the debt to total assets ratio is that it is used to evaluate a company's solvency and long-term debt-paying ability. Therefore, the right choice is 'c) it is used to evaluate a company's solvency and long-term debt-paying ability.' The debt to total assets ratio does not involve market price per share or basic earnings per share, which relates to profitability ratios, nor does it involve the calculation of gross profit by net sales, which is part of profitability analysis.
Instead, this ratio reflects the extent to which a company's assets are financed through debt and is a key indicator of financial stability in the long term. For short-term debt-paying ability and liquidity, other ratios such as the current ratio or quick ratio are utilized.