John was a college student with an earned income of $ 8,000. On May,2022, he received...

 

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John was a college student with an earned income of $ 8,000. On May,2022, he received a scholarship for $5,000. He used the scholarship to help pay for his tuition of $6,000. During 2022, he paid $6,600 in rent, $3,200 in food, $2,000 in clothing, $1,200 in auto loan payments, $300 in income taxes, and $3,600 in other variable expenses. 1. Develop John's Annual Cash Flow Statement for January1 to December 31, 2022 2. Calculate John's two financial ratios by using (Assets) from John's BS in the previous Class activity and (Expenses and Income) from CFS above and explain what the ratios mean. 1. Emergency Fund Ratio (Monetary assets/ monthly expenses): Reference=3 to 6 months. (Note: be careful about the period (i.e., month or year)). What does this ratio mean? 2. Total Debt to Income Ratio (Total debt payment/gross income): Reference=36% What does this ratio mean? John was a college student with an earned income of $ 8,000. On May,2022, he received a scholarship for $5,000. He used the scholarship to help pay for his tuition of $6,000. During 2022, he paid $6,600 in rent, $3,200 in food, $2,000 in clothing, $1,200 in auto loan payments, $300 in income taxes, and $3,600 in other variable expenses. 1. Develop John's Annual Cash Flow Statement for January1 to December 31, 2022 2. Calculate John's two financial ratios by using (Assets) from John's BS in the previous Class activity and (Expenses and Income) from CFS above and explain what the ratios mean. 1. Emergency Fund Ratio (Monetary assets/ monthly expenses): Reference=3 to 6 months. (Note: be careful about the period (i.e., month or year)). What does this ratio mean? 2. Total Debt to Income Ratio (Total debt payment/gross income): Reference=36% What does this ratio mean?

Answer rating: 100% (QA)

Emergency Fund Ratio To calculate Johns Emergency Fund Ratio we need to divide his Monetary assets b... View the full answer