Based on the Financial statements constructed above, you are to compute and outline how the gambling debt has impacted “Outer Space’s” 5 Financial Ratios. Demonstrate and briefly explain its importance in understanding their financial health (Hint: compute and compare financial ratios before and after gambling debts): 

I. Basic Liquidity Ratio 

II. Debt Service Ratio 

III. Liquid Asset to Net Worth Ratio 

IV. Net investment Asset to Net Worth Ratio 

V. Debt to Asset Ratio

  

 

 

 

HOUSEHOLD EXPENSES (In 2019) The breakdown of annual household expenses ($60,050) incurred by "Outer Space's" family is as follows: Description Tax Saving Food Public Transportation Clothing Entertainment/Vacation Medical/Dental Care $350.00 Utilities/ Household Expenses $8,800.00 Mortgage Repayment $15,450.00 "Outer Space's" mother Allowance $6,000.00 Insurance Premium $1,820.00 Miscellaneous $7,500.00 Total Expenses $60,050.00 ASSETS (In 2019) "Outer Space" and "Tight Space" live at Upper Serangoon Road, in a 5-room HDB flat near Kovan MRT station. The property is registered as single owner. Today, it is worth $460,000 and has an outstanding loan of $320,000. SUM ASSURED $40,000 Whole Life ("Outer Space") Whole life ("Tight $40,000 Space") Amount $630.00 $0.00 CPF BALANCES (In 2019) "Outer Space's" current (approximate) balance in his CPF Ordinary Account is $35,000. The current (approximate) balance in his Special Account is $15,000. "Tight Space's" CPF Ordinary Account balance is $20,000 and Special Account $10,000. $10,000.00 $3,500.00 $3,500.00 $2,500.00 RISK MANAGEMENT (In 2019) The insurance portfolio for both "Outer Space" and "Tight Space" can be broken down as follows: TYPE CASH VALUE $9,600 $6,500 PREMIUM PER ANNUM $1,010 $810 NOMINATED BENEFICIARY Nil "Tight Space"