Calculate the following ratios: a. Liquidity ratio b. Asset-to-debt ratio c. Debt-to-income ratio
Calculate the following ratios: a. Liquidity ratio b. Asset-to-debt ratio c. Debt-to-income ratio
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Given the
Liquid assets: $10,000; home value: $210,000; monthly mortgage payment: $1,300 on $170,000 mortgage; investment assets: $90,000; personal property: $20,000; total assets: $330,000; short term debt: $5,500 ($250 a month); total debt: $175,500; monthy gross income: $9,000; monthly disposable income: $6,800; monthly expenses: $6,000.
Calculate the following ratios:
a.
b. Asset-to-debt ratio
c. Debt-to-income ratio
d. Debt payments-to-disposable incoome ratio
e. Investment assets-to-total assets ratio
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