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Do the Math 3-3 Ratio Analyses Use the following balance sheet and cash flow statement information...

Do the Math 3-3 Ratio Analyses Use the following balance sheet and cash flow statement information to answer the questions below. Liquid assets: $14,000; home value: $210,000; monthly mortgage payment: $1,450; investment assets: $75,000; personal property: $20,000; total assets: $319,000; short-term debt: $4,200 ($350 a month); long-term debt: $160,000 ($2,200 a month); total debt: $164,200; monthly gross income: $13,000; monthly disposable income: $6,800; monthly expenses: $5,500. Calculate the ratios below. Round your answers to two decimal places. Liquidity ratio. Asset-to-debt ratio. Debt-to-income ratio. % Debt payments-to-disposable income ratio. % Investment assets-to-total assets ratio. %

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Answer #1

Liquidity Ratio = Liquid Assets / Short Term Debt = 14,000/4,200 = 3.33
Asset to Debt ratio = Toatl Assets/ Total debt = 319,000/164,200 = 1.94
Debt to Income ratio = Total Debt/ (Gross Income + Disposable income -expenses) = 164,000/((13,000+6800-5500)*12) = 11.47(If yearly ratio is to be calculated then (11.47/12 = 0.9558 or 95.58%
Debt Payments to disposbable income = (Long term debt payment + short term debt payment)/disposable income =
(2200 + 300)/(6800) = 36.76%
Investment assets to total assets = 75000/319,000 = 23.51%
Best of Luck . God Bless

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