Question

Calculate your net worth and your debt ratio, current ratio, liquidity ratio, debt payment ratio, and inflows and outflows, do you have a shortage or surplus.

Current Value of your home $330,000 Monthly gas $300.00

Balance of car loan $27,000 Monthly utilities $500.00

Balance of student loans $29,000 Monthly groceries $1100.00

Value of car $40,000 Monthly meals out $400.00

Balance of Mortgage $200,000 Monthly cable/internet $150.00

Household contents $19,000 Monthly cell phone $275.00

Stock portfolio 194,000 Monthly Miscellaneous $75.00

Balance of personal loan 20,000 Monthly Insurance & taxes payment $480.00

Balance of credit card $2,000 Monthly car payment $600.00

Balance of medical bills $1,000 Monthly car insurance $240.00

Liquid Assets $8,500 Monthly credit card payment $100.00

Monthly student loan payment $450.00 Monthly personal loan payment $350.00

Monthly income $8,500

Monthly Mortgage payment $1,000

Answer 1

To calculate the ratios first bifurcate the given items as assets or liabilities. The bifurcation is given below: -

Description	Amount	Type
Stock Portfolio	$1,94,000	Current Asset
liquid assets	$8,500	Current Asset
Home	$3,30,000	Non-Current Assets
Car	$40,000	Non-Current Assets
Household Contents	$19,000	Non-Current Assets
Balance of Credit card	$2,000	Current Liabilities
Medical Bills	$1,000	Current Liabilities
Car Loan	$27,000	Non-Current Liabilities
student loan	$29,000	Non-Current Liabilities
Balance Mortgage	$2,00,000	Non-Current Liabilities
Personal Loan	$20,000	Non-Current Liabilities

Now with the help of the above data, we will find out the asked ratios

1. Debt Ratio: Debt ratio is calculated by dividing the total long term debt by the total assets. As per the data given the total debt is of $276,000 which includes the Car loan, Student loan, Balance Mortgage and Personal loan. total assets as per the given data are $591,500.  Hence, the debt ratio = 276,000/591,500 = 0.47
2. Current Ratio = Total Current Assets/Total Current Liabilities = 202,500/3,000= 67.50
3. Liquidity ratio (Acid Test ratio) = liquid assets/Current liabilities = 8500/3000 = 2.83
4. Debt Payment ratio= Total monthly debt payments/ monthly Income = 2500/8500 = 0.29. monthly debt payments include repayment of car loan, student loan, Personal loan, mortgage loan and credit card payment.

Now, let's calculate the net monthly cash inflow or outflow. please find below the monthly income - expense statement made from the given date.

Income	Amount
Monthly Income (A)	$8,500
Expenses
Gas	$300
Utilities	$500
groceries	$1,100
Meals	$400
Cable/Internet	$150
Cell Phone	$275
miscellaneous	$75
Insurances & Taxes	$480
Monthly car Payment	$600
Car Insurance	$240
Monthly Credit Card Payment	$100
Monthly Student Loan Payment	$450
Monthly Personal Loan Payment	$350
Monthly Mortgage payment	$1,000
Total Expenses (B)	$6,020
Net Inflow (A - B)	$2,480