Question

In: Finance

assignments for the corresponding assignment. Use the following balance sheet and cash flow information to determine...

assignments for the corresponding assignment.

Use the following balance sheet and cash flow information to determine the net worth and net surplus for an individual in a recent month:

Liquid Assets $15,000

Home Value $220,000

Investment assets: $120,000

Personal Property $30,000

Total assets: $385,000

Short Term Debt: $7000 ($250 a month)

Monthly Mortgage Payment $1400 on a $180,000 mortgage

Total Debt: $187,000

Monthly Gross Income: $11,000

Monthly Disposable Income $ 4000

Monthly Expenses: $7000

Now that the individual in question 1 has a better understanding of their situation, let’s analyze further. Given the balance sheet and cash-flow statement information in question 1, calculate the following ratios see page 87:

Liquidity Ratio

Asset-to-Debt Ratio

Debt-to-Income Ratio

Debt payments-to-disposable income ratio

Investment assets-to-total assets ratio

Expert Solution

Q.1

1.Networth: It is the difference of Total assets and Total liabilities

= 385000 - 187000

= 198000

2.Net surplus :it is the difference of Monthly gross income and expenses

= 11000 - 7000

= 4000

Q.2

1.Liquidity Ratio = it is the ratio to determine how quick the organisation converts its current assets into cash so that it can pay off its liability on a timely basis.

Liquid ratio = Current assets/ current liabilities

= 15000/7000 = 2.143

2.Asset to Debt ratio = It is the indicator for determining the percentage of company's total assets that were financed

= Total liabilities / Total Assets

= 187000/385000

= 0.4857

3. Debt to Income ratio = It is monthly debt payments divided by gross monthly income

= (250+1400)/11000

= 1650/11000 =0.15

4. Debt payments to disposable income ratio = it is the ratio for the monthly debt payments to monthly disposable income

= 1650/4000 = 0.4125

5.Investment assets to total assets ratio = It is the ratio for the investment assets to total assets of the company

= 125000/385000

= 0.31168

jeff jeffy answered 3 months ago

From the following balance sheet and additional information given, prepare cash flow statement. Balance Sheet as...

From the following balance sheet and additional information given, prepare cash flow statement. Balance Sheet as on March 31, 2005 and 2006 Particulars 2005 Rs. 2006 Rs. Particulars 2005 Rs. 2006 Rs. Share Capital 9,00,000 9,00,000 Fixed Assets 8,00,000 6,40,000 General Reserve 6,00,000 6,20,000 Investments 1,00,000 1,20,000 Profit & loss a/c 1,12,000 1,36,000 Stock 4,80,000 4,20,000 Creditors 3,36,000 2,68,000 Debtors 4,20,000 9,10,000 Provision for tax 1,50,000 20,000 Bank 2,98,000 3,94,000 Mortgage loan - 5,40,000 20,98,000 24,84,000 20,98,000 24,84,000 Additional Information:...

Specter Co. combines cash and cash equivalents on the balance sheet. Using the following information, determine...

Specter Co. combines cash and cash equivalents on the balance sheet. Using the following information, determine the amount reported on the year-end balance sheet for cash and cash equivalents. $7,000 cash deposit in checking account. $28,000 bond investment due in 20 years. $7,000 U.S. Treasury bill due in 1 month. $400, 3-year loan to an employee. $1,800 of currency and coins. $700 of accounts receivable. Checking account: Bond investment: U.S. Treasury bill: Loan to an employee: Currency and coins: Accounts...

Compare and contrast Free Cash Flow, Cash Flow (balance sheet to balance sheet) and CFO (6...

Compare and contrast Free Cash Flow, Cash Flow (balance sheet to balance sheet) and CFO (6 points)

What information is shown on an income statement, a balance sheet, and a cash flow statement?

Based on the information below create an income statement, balance sheet, and cash flow statement. On...

Based on the information below create an income statement, balance sheet, and cash flow statement. On January 2, 2003, Alexander, together with a number of relatives and friends, established Chemalite, Inc.; 500,000 shares were issued, of which Alexander received 125,000 in exchange for his patent, and the remainder were sold to the other investors at $1 per share. During the period January 2, 2003, through June 30, 2003, Chemalite, Inc., made the following expenditures: January 15—Paid $7,500 in legal fees,...

Use the following balance sheet information to answer this question. Balance Sheet (dollars in thousands) and...

Use the following balance sheet information to answer this question. Balance Sheet (dollars in thousands) and Duration (in years) Duration Amount T-bills 0.5 90 T-notes 0.9 55 T-bonds 4.393 176 Loans 7 2,724 Deposits 1 2,092 Federal funds 0.01 238 Equity 715 A )What is the average duration of all the assets? B )What is the average duration of all the liabilities? C )What is the FI’s leverage-adjusted duration gap? What is the FI’s interest rate risk exposure? D...

Determine the amount of long-term debt for ABC Co. using the following balance sheet information: cash...

Determine the amount of long-term debt for ABC Co. using the following balance sheet information: cash balance of $24,723, accounts payable of $95,591, common stock of $401,194, retained earnings of $500,129, inventory of $204,960, other assets equal to $76,133, net plant and equipment of $707,654, short-term notes payable of $30,000, and accounts receivable of $142,312.

Based on the information below create the year end income statement, balance sheet, and cash flow...

Based on the information below create the year end income statement, balance sheet, and cash flow statement. On January 2, 2003, Alexander, together with a number of relatives and friends, established Chemalite, Inc.; 500,000 shares were issued, of which Alexander received 125,000 in exchange for his patent, and the remainder were sold to the other investors at $1 per share. During the period January 2, 2003, through June 30, 2003, Chemalite, Inc., made the following expenditures: January 15—Paid $7,500 in...

Prepare a balance sheet and cash flow statement using the selected financial statement information and additional...

Prepare a balance sheet and cash flow statement using the selected financial statement information and additional data for Stanislaus Co. presented below. Balance sheet December 31 2015 Cash.......................................................... $52,000 Accounts receivable (net)........................... 64,000 Inventory.................................................. 178,000 Land.......................................................... 78,800 Equipment................................................. 504,000 TOTAL............................................ $876,800 Accumulated depreciation.......................... $94,000 Accounts payable....................................... 50,400 Notes payable - short-term........................ 67,200 Notes payable - long-term.......................... 178,000 Common stock........................................... 420,000 Retained earnings...................................... 67,200 TOTAL............................................ $876,800 ...

How does a balance sheet relate to a cash flow statement?