The following is a portion of the balance sheets of Macy's, Inc. for the years ended January 30, 2016 and January 31, 2015:

Macy's debt to equity ratio for the year ended January 30, 2016, was 3.84, calculated as ($20,576 - 4,253) ÷ 4,253. Some analysts argue that long-term deferred tax liabilities should be excluded from liabilities when computing the debt to equity ratio.
Required:
1. What is the rationale for the argument that long-term deferred tax liabilities should be excluded from liabilities when computing the debt to equity ratio?
2. What would be the effect on Macy's debt to equity ratio of excluding deferred tax liabilities from its calculation? What would be the percentage change?
3. What might be the rationale for not excluding long-term deferred tax liabilities from liabilities when computing the debt to equity ratio?

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January 30, 2016 January 31, 2015 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: $ 642 1,526 3,333 227 5,7 28 6,995 1.477 2,123 $ 76 1,594 3,109 296 5,075 7,233 1,443 2,201 Short-term debt Merchandise accounts payable Accounts payable and accrued liabilities Income taxes Total Current Liabilities Long-Term debt Deferred Income Taxes Other Liabilities Shareholders' Equity Common stock (310.3 and 340.6 shares outstanding) Additional paid-in capital Accumulated equity Treasury stock Accumulated other comprehensive loss 3 621 6,334 (1,665) (1,043) 4,250 3 4,253 $20,576 4 1,048 7,340 (1,942) (1,072) 5,378 Total Macy's, Inc. Shareholders' Equity Noncontrolling interest Total Shareholders' Equity Total Liabilities and Shareholders' Equity 5,378 $21,330