Question: Jarrod is a college student All of Jarrod s disposable income
Jarrod is a college student. All of Jarrod’s disposable income is used to pay his college related expenses. While he has no liabilities (Jarrod is on a scholarship), he does have a credit card that he typically uses for emergencies. He and his friend went on a shopping spree in New York City costing $ 2,000, which Jarrod charged to his credit card. Jarrod has $ 20 in his wallet, but his bank accounts are empty. What is Jarrod’s liquidity ratio? What does this ratio indicate about Jarrod’s financial position?
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