Please answer each question as a new step!

Your friend, Cindy Brady, has come to you for financial advice. She graduated from college

three years ago and was hired right out of college by a firm she had interned with the summer

before her senior year. Her salary is $$50,000/$year$.$ She has health and dental insurance through

her employer $($premiums are deducted from paycheck$).$ They also offer a $401($k$)$ that she is

eligible for. During college, she had always planned to begin contributing to a $401($k$)$ with her

first paycheck, but she was not eligible with this employer until she worked there for one year.

By the time she was eligible, she had purchased a new car, so still didn$$t begin contributing.

Shortly after that, she moved to a nicer $($and more expensive$)$ apartment with some friends, so

she still doesn$$t seem to have any of her paycheck left, and still has not started saving for

retirement. She knows that the longer she waits to begin saving, the harder it will be$,$ so she has

come to you for advice on how she can get her budget under control and start saving.

Cindy had previously written out her budget and expected to have almost $$300$ left over

each month that she would save, but her savings account never seems to grow. Also, about a

year ago, Cindy found herself with rising credit card debt and she was beginning to have

difficulty making even the minimum monthly payments. She made some spending changes and

began making higher than minimum payments and has reduced the balances somewhat, but

they are taking longer to pay off than she expected.

Cindy knows that because you took Finance $30$ at Fresno State, you can help her to get

her financial house in order. She has brought you her paycheck stub, her projected budget and

other statement information. She tells you that she wants to start saving for retirement and pay

off her credit cards but doesn$$t really know where to start. She has also heard that you are

supposed to have an Emergency Fund but doesn$$t know if she really needs one or how much it

should be$.$ She asks you what she can do to help build financial security. Read through and

assimilate the following information to help Cindy reach her goals:

Monthly Paycheck:

Gross Salary $4,167$

FICA Tax $319$

Fed w$/$h $225$

State w$/$h $80$

Health Insurance $200$

Dental Insurance $50$

Net Paycheck $3,293$

Budget:

Paycheck $3,293$

Less Expenses $($assume all bills are paid in same month as received$)$:

Rent $1,200$

Student Loan payment $300$

Auto Payment $300$

Auto Insurance & Fuel $250$

Utilities $350$

Groceries $300$

Misc Exp$/$Entertainment $3003,000$

Surplus $293$

Statement Balances:

Auto Loan $17,000$

Student Loan $12,000$

Credit Card Balance $2,500$

Checking Account $1,500$

Savings Account $500$

Other Assets $($Market Value$)$:

Car $15,000$

Personal Property $5,000$

Cindy has tracked her spending for the last $3$ months using her checking account and credit card

statement. Below are her ACTUAL average Monthly Expenses. Assume all bills are paid when

she receives them.

Rent $1,200$

Student Loan payment $($Income$-$Based Repayment plan$)140$

Car Payment $400$

Auto Insurance & Fuel $250$

Renter$$s Insurance $50$

Food $($groceries$)350$

Utilities $350$

Entertainment$/$ Miscellaneous $500$

$($including eating out$)$

Clothing $125$

ATM withdrawals $160$

Credit Card Payment $100$

$($more than minimum, but doesn$$t pay in full$)$

Financial Statements & Analysis:

$3.$What is Cindy$$s Net Worth?

$4.$What is Cindy$$s Current Ratio?

$5.$What is Cindy$$s Debt Ratio?

$6.$What is Cindy$$s actual monthly Surplus$/$Deficit$?$

$7.$Is Cindy$$s monthly rent payment in$-$line with HUD recommendations? Explain.

$8.$What is Cindy$$s Savings Ratio?

$9.$What is Cindy$$s Emergency Fund Ratio?

$10.$Is Cindy meeting her stated monthly budgeting goals? Support your answer. If not,

give two specific suggestions to correct this and demonstrate mathematically how they

will correct the problem.

Liquidity & Debt Management:

$11.$Is Cindy$$s Emergency Fund sufficient? If not, what amount should she be working

towards? Justify your answer.

$12.$Why is it taking Cindy so long to pay off her credit cards? $($provide $2$ reasons$)$

$13.$ Comment on Cindy$$s student loan repayment plan and any concerns or suggestions

you have for her. Remember, her goal is to build financial security.

Retirement Savings:

$14.$ Since Cindy was not eligible for her company$$s $401$k during her first year of

employment, what could she have done to stick with her plan of beginning to save for

retirement with her first paycheck?