Faith Brooks, a 28-year-old college graduate, never took a personal finance class. She pays her bills on time, has managed to save a little in a mutual fund, and with the help of an inheritance has managed a down payment on a condominium. But Faith worries about her financial situation. Given the following information, prepare Worksheet 4 and Worksheet 5. Using information from these statements, calculate the current ratio, savings ratio, month's living expenses covered ratio, debt ratio, and long-term debt coverage ratio. Interpret these financial statements and ratios for Faith. Based on your assessment, what advice would you give Faith? In addition to the following list, Faith offers these explanations:
™¦ All short-term and long-term liabilities are unpaid.
™¦ "Other expenses, monthly" represents cash spent without a record.
™¦ She charges all incidentals on her credit cards and pays the balances off monthly. The balances shown below represent her average monthly balances.

Transcribed Image Text:

Visa bill Stocks MasterCard bill Monthly paycheck, net Annual medical expenses Mortgage payment, monthly Temple Mutual Fund 401(k) retirement account Car payment, monthly Total monthly utilities Savings account Clothing expense, monthly $355 $5,500 $245 52,400 $264 $530 $2,100 54,500 $265 5275 $2,300 $45 Checking account Quarterly auto insurance (not due) Inherited coin collection Condominiunm Food, monthly Auto Furnishings Mortgage outstanding Auto loan outstanding Other personal property Other expenses, monthly $825 $450 53,250 $65,000 5225 $9,000 $5,500 $50,000 $4,225 58,000 $150