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Bingel [31]
3 years ago
10

Ratio Analyses

Business
1 answer:
ElenaW [278]3 years ago
7 0

Answer:

Since the requirements were missing, I looked for similar questions:

(a) Liquidity ratio  for individuals

basic liquidity ratio = cash (liquid) assets / monthly expenses = $16,000 / $7,000 = 2.29

Depending on the maturity of the investment assets, the liquidity ratio could increase, but since the information is limited, we can only consider liquid assets. E.g. if the investment assets include bonds that mature in a very short term they should be included in this formula, but if they include bonds that mature in x number of years, then they aren't included.

(b) Debt-to-asset ratio :

generally the formula is debt to asset ratio = $175,400 / $326,000 = 0.54

 

(c) Debt service-to-income ratio

debt service to income ratio = monthly payments / gross income = ($450 + $2,200) / $13,000 = $2,650 / $13,000 = 0.20

(d) Debt payments-to-disposable income ratio

debt payments to disposable income ratio = monthly payments / disposable income = ($450 + $2,400) / $6,000 = $2,650 / $6,000 = 0.44

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Read the description of following adjustments that are required at the end of the accounting period for Paulo Consulting Service
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Answer:

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8 0
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