The Current Ratio measures the ability to pay current payables as they come due by comparing current assets to current liabilities. It is a measure of short-term liquidity. A higher ratio indicates a stronger ability to pay current debts. The Debt Ratio measures the proportion of assets financed by debt by comparing total liabilities to total assets. It is a measure of long-term solvency. A higher ratio indicates greater financial risk. Use the chart above to answer the following questions. Stock symbols are shown in parentheses. Q1 Of the above three restaurant chains, which is your favorite? (DIN / DRI / NATH) - DIN operates Applebee's Neighborhood Grill \& Bar and IHOP. - DRI operates Red Lobster, Olive Garden, Bahama Breeze, and Smokey Bones Barbeque and Grill. - NATH operates Nathan's Famous. Q2 (DIN / DRI / NATH) have sufficient current assets to pay off current liabilities and, therefore, have a current ratio (greater / less) than 1.0. A current ratio that is (lower / higher) than the industry average may indicate a lack of short-term liquidity, which includes (DIN / DRI / NATH). Does this indicate that this corporation is insolvent or unable to pay its bills? (Yes / No) Explain. Q3 (DIN / DRI / NATH) are relying more on debt to finance assets and have a debt ratio (greater / less) than 50%. Darden Restaurants is financing \% of assets with debt. For a company wanting to be lower risk and less dependent on debt, a(n) (increasing / decreasing) trend in the debt ratio is considered favorable. A company that has higher financial risk will, in general, be required to pay (higher / lower) interest rates when borrowing money. Q4 Why does a company with a higher debt ratio tend to have greater financial risk? Q5 Does a high debt ratio indicate a weak corporation? (Yes / No) Explain your answer. - Instead of reporting the Debt Ratio, some financial sources report the Debt-to-Equity rotio, computed as Habilities divided by