Individuals, like corporations, can use financial ratios to analyze and monitor their performance. Typically, personal finance ratios are calculated using the personal income and expense statement and personal balance sheet for the period of concern. Here you will use these statements to calculate Jan and Jon Smith’s liquidity ratio for calendar year 2021. 

 Calculate personal current ratio and show all work including the formula used.

 What does the current ratio indicate?

 Do their liquid funds provide a large cushion given all of the information shown on their balance sheet?

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Assets Cash on hand Jan and Jon Smith's Balance Sheet: December 31, 2021 Checking accounts Savings accounts Money market funds Total liquid assets Stocks and bonds $ 90 575 760 800 $ 2,225 $ 2,250 Liabilities and Net Worth Credit card balances Utility bills Medical bills Other current liabilities Total current liabilities Real estate mortgage $ 665 265 75 45 $ 1,050 $120,000 Assets Cash on hand Jan and Jon Smith's Balance Sheet: December 31, 2021 Checking accounts Savings accounts Money market funds Total liquid assets Stocks and bonds $ 90 575 760 800 $ 2,225 $ 2,250 Liabilities and Net Worth Credit card balances Utility bills Medical bills Other current liabilities Total current liabilities Real estate mortgage $ 665 265 75 45 $ 1,050 $120,000

Answer rating: 100% (QA)

To calculate Jan and Jon Smiths personal current ratio you need to use the formula for the current r... View the full answer