A financial planner is working with a now client who has a debt service ratio of $15\%,$ a monthly gross income of R$20,000,$ and monthly debt repayments of R$3,000.$ They also have short$-$term investments of R$50,000$ and total debt of R$200,000.$ Considering the brosder context of financial planning and the implications for the clients long$-$term fanteltt cith, which of the following statements represents the best financial planning practice in the analysis of their debt service ratio?

Select the correct answer:

The client's debt service ratio is acceptable because it is below the $20$ w threshold, often cited as a benchmark for responsible debt management. The cliont has sufficient shortterm investments, which demonstrates their capacity to manage debt.

The debt service ratio indicates that $15\%$ of the client's monthly income is used to service debt, and whi? this appears manageable in the short term, it does not indicate the longterm impact of the client's debt on their capacity to save and irvest, and additionst information about the client's overall financial goals, life cycle and risk tolerance is needed.

The debt service ratio of $15\%$ indicates that the client is using a significant portion of their monthly income to repay debt, and this requires the financial planner to focus on strategies to reduce debt levels as quickly as possible using short$-$term investments.

The debt service ratio of $15\%$ is a useful measure of the client's capacity to repay debt. Still, it is not as important to consider the solvency ratio when considering the client's overall financial well$-$being.