QUESTION:

1. How do I solve for the ratios? I am highly confused with how to solve the Living Expenses Covered Ratio (Monetary Assets / Monthly Living Expenses), Debt Service to Income Ratio (Annual Debt Payments / Gross Annual Income), and Saving Ratio (Annual Savings / Annual Living Expenses).

Thank you very much!

Introduction to Personal Finance Cash Flow Statement Harry and Sally Jones January 1, 2018 - December 31, 2018 CASH INFLOWS Harry and Sally Jones are in a desperate need of your help! They want to know how well they are doing financially and how could they improve their situation. Income Annual Amount Based on information they provided to you: 1. Construct their Balance Sheet and their Cash Flow Statement. 2. Calculate their financial well-being through the use of Ratios. 3. Explain their financial well-being and recommendations. Total Cash Inflows CASH OUTFLOWS S $ S S $ S S S S LIVING EXPENSES Fixed Expenses Annual Amount S S Harry's Salary Sally's Salary Home value Mortgage payment 2010 Lexus fair market value Checking Account balance Groceries Investment Account balance that holds mutual funds) 2010 Lexus loan payment Past Due Utility Bill Utilities Expenses Credit Card balance Entertainment 2010 Lexus loan balance Stamp Collection Gas Mortgage balance Credit Card payments Jewelry Savings set aside each year towards a new car Tax Refund Money Market Account balance 401(k) Account balance Cash Auto Insurance payments S S $ S S $ S S S 24,000 24,000 200,000 12,000 38,000 900 6,000 500 6,000 200 1,200 1,000 2,400 25,000 1,900 3,600 180.000 2,400 100 600 1,000 2,000 500 100 960 Total Fixed Expenses Variable Expenses S S S S $ Total Variable Expenses Total Living Expenses