Balance Sheet Assets

Monetary
Cash on hand Savings account Checking account Total monetary 25 150 2000 500 175 200 2200 7000 7000 3000 10000 10000 350 500 5000 5850 17000 850

Liabilities
Short-Term
Doctor bill Credit card debt Taxes Total Short-Term

Tangible
Automobile Personal property Total Tangible

Long-Term
Car payment Student Loans Total Long-Term

Investment
Mutual fund Total stock Life insurance cash value Total Investment

Total assets

18050

17850

Total Liabilities

Cash Flow Statement

Category Income Salary Gifts Birthday Total income Expenditures Fixed Cell-phone Auto insurance Emergency fund Total fixed Variable Food Gasoline/maintenance Medicine Clothes Miscellaneous Total variable Total expenditures Dollars 6000 500 100 6600

708 1800 1200 3708 2000 950 50 300 100 3400 7108

Deficit

(508)

Ratio Analysis
1. 2. 3. Ratio Liquidity Ratio Asset-to-Debt Ratio Debt Serviceto-Income Ratio Debt Payments-toDisposable Income Ratio Investment Assets-toTotal Assets Ratio Formula Monetary assets Monthly expenses Total assets Total debts Annual debt repayments Gross income monthly mortgage debt repayments monthly disposable income investment assets total assets Insert 2200 (7108/12) 18050 17850 0 6600 0 (6600/12) Calculation 3.71 1.01 0

4.

5.

5850 18050

32.4%

1. If a loss of income were to occur, one could expect to last 3 and 7/10 of a month with his or her current monetary assets and monthly expenses. Because experts advise having 3 to 6 months worth of income saved up, this would barely qualify as sufficient funds. 2. This person owns items that are basically worth his or her debts. The higher the number for this ratio, the better. 1.01 is a very poor number to have. The total assets for this person are just enough to pay off all of his or her debts. 3. I did most of this project based on my own financial situation. Because I have no annual loan repayments (mortgage loan, car loan, etc.), my annual debt repayments is 0. This is an excellent debt service-to-income ratio, especially considering that having a ratio of 0.36 or less is desirable. 4. Again, I have no monthly mortgage debt repayments, so my debt payments-todisposable income ratio is 0. It is good to have a low debt payments-to-disposable income ratio. 5. The investment assets-to-total assets ratio is 32.4%. This ratio indicates that 32.4% of the total assets are investment assets. The ratio reveals how well an individual or family is advancing toward their financial goals. This level is appropriate for those in their 40s.

A ratio of 50% or more is desirable, so this person is well on their way to having a good investment assets-to-total assets ratio.