The debt to asset ratio indicates what about a company's financial structure?

The debt to asset ratio is an important financial metric that reveals the proportion of a company’s assets that are financed through debt. This ratio is calculated by dividing total liabilities by total assets. A higher debt to asset ratio indicates that a larger portion of the company's assets is financed by debt, which means the company is more leveraged. This leverage can amplify both returns and risks, as companies with significant debt may face greater pressure during economic downturns or when cash flows are tight.

Thus, option B accurately captures the essence of what the debt to asset ratio signifies about a company's financial structure, highlighting the extent of its leverage. The other options relate to different aspects of financial performance and risk. For instance, profitability and efficient asset utilization are not directly indicated by this ratio. Similarly, stock volatility pertains more to market perception rather than the company's leverage or financial structure.