Question: help with ratios from financial tracking 41 Styles NAME(S) DATE FINANCIAL RATIOS BASIC LIQUIDITY RATIO Importance the basic liquidity ratio reveals the number of months

help with ratios from financial tracking

41 Styles NAME(S) DATE FINANCIAL RATIOS BASIC LIQUIDITY RATIO Importance the basic liquidity ratio reveals the number of months a household could meet current expenses using liquid assets without additional income. $ $ Liquid Assets (from Net Worth Statement) Monthly Expenses (from I and E Statement Basic Liquidity Ratio Recommendation: 3.0 or more ASSET-TO-DEBT RATIO Importance: measures solvency. If a person owes more than they own, they are insolvent. They would not be able to sell all their assets to pay all their debts. $ - $ Total Assets (from Net Worth Statement) Total Liabilities (from Net Worth Statement) Asset-to-Debt Ratio Recommendation: the higher the better. Under 10 is insolvent DEBT PAYMENT-TO-INCOME RATIO Importance: shows ability to make current debt payments Annual Debt Payments (add only monthly debt payments from I and E Statement $ then X 12 Gross Income (from I and E Statement X + S 12) Debt Payment-to-Income Ratio Recommendation: below 36 is adequate, 36 to 41 is marginal. above 41 is risky 12 IL 30% TRACKING DATE Month of Feburary 2021 Expense Income Amount Amount DESCRIPTION 100 175.58 353.79 109.35 60.49 2/05/2021 2/08/2021 2/08/2021 2/10/2021 2/15/2021 2/18/2021 2/20/2021 2/20/2021 2/25/2021 2/28/2021 2/28/2021 2/28/2021 100 Work book check Wholesale products Sale of products Sale of product Shipping of products Work book check gas hay Colt check Work book check Sale of product Groceries 85 120 800 100 86.98 367.05 41 Styles NAME(S) DATE FINANCIAL RATIOS BASIC LIQUIDITY RATIO Importance the basic liquidity ratio reveals the number of months a household could meet current expenses using liquid assets without additional income. $ $ Liquid Assets (from Net Worth Statement) Monthly Expenses (from I and E Statement Basic Liquidity Ratio Recommendation: 3.0 or more ASSET-TO-DEBT RATIO Importance: measures solvency. If a person owes more than they own, they are insolvent. They would not be able to sell all their assets to pay all their debts. $ - $ Total Assets (from Net Worth Statement) Total Liabilities (from Net Worth Statement) Asset-to-Debt Ratio Recommendation: the higher the better. Under 10 is insolvent DEBT PAYMENT-TO-INCOME RATIO Importance: shows ability to make current debt payments Annual Debt Payments (add only monthly debt payments from I and E Statement $ then X 12 Gross Income (from I and E Statement X + S 12) Debt Payment-to-Income Ratio Recommendation: below 36 is adequate, 36 to 41 is marginal. above 41 is risky 12 IL 30% TRACKING DATE Month of Feburary 2021 Expense Income Amount Amount DESCRIPTION 100 175.58 353.79 109.35 60.49 2/05/2021 2/08/2021 2/08/2021 2/10/2021 2/15/2021 2/18/2021 2/20/2021 2/20/2021 2/25/2021 2/28/2021 2/28/2021 2/28/2021 100 Work book check Wholesale products Sale of products Sale of product Shipping of products Work book check gas hay Colt check Work book check Sale of product Groceries 85 120 800 100 86.98 367.05

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