1. Current Ratio Calculate the current ratio using the information above. Remember, the current ratio is Monetary Assets/Current Liabilities.

2. Current Ratio explained Monetary Assets= Cash, checking, savings/CDs, money market funds Current Liabilities= current bills and credit card debts $2300 + $825 + $400 =3525 =3.09 $355 + $245 + $275 + $265 1140

3. Month’s Living Expenses Covered Ratio Calculate the month’s living expenses covered ratio, which is Monetary assets/(annual living expenditures/12)

4. Monthly Living… explained Monetary Assets= Cash, checking, savings/CDs, money market funds Annual Living Expenses (can be found on income statement) $2300 + $825 + $400 =3525 =.81 $52,296/12 4358 Meaning they have enough cash and liquid assets on hand to cover.81 months of expenditures

5. Debt Ratio Calculate the debt ratio, using the total debt or liabilities/ total assets

6. Debt Ratio Explained Tells what percentage of your assets has been financed by borrowing $189,600 =.63 or 63% of their income $301,250 If you manage your finances well, this ratio should go down as you get older.

7. Long Term Debt Coverage Ratio Calculate the long term debt coverage ratio using Total Income Available for Living Expenses/Total Long-Term Debt Payments

8. Long-term Explained Living Expenses (given on income statement) Debt payments can be found by adding all long-term debts (payments over a year) 65,510________ = 2.16 $20,656 + $2,588 + $1500 + $265 A debt coverage ratio of less than approximately 2.5 should raise a caution flag.

9. Calculate Savings Ratio Calculate the savings ratio using Income Available for Savings and Investment/ Income Available for Living Expenses

10. Savings Ratio Explained $4276 =.076 $56,510 Explains how much of your income you are saving and investing

11. Calculate Net Worth Assets- Liabilities = Net Worth or Equity