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Financial Statement Ratios
Financial statement ratios play an important role in understanding and interpreting financial data. The solvency, liquidity, savings, and debt service ratios are important tools that will provide you with information, helping you chart and improve your personal financial planning. Complete the equations for each of the following financial statement ratios.
Soleency Ratio
Liquidity Ratio
Sarings Ratio
Debe Service Ratio
Brock Newman has prepared his annual finencial statements in order to analyze the data. The data provided are items from Brock's balance sheet and ncome and expense statement. Use the data provided to calcuilate Brock's financial statement ratos. For example, 15006 would be entered as "15.0%".
Brock's Financial Data
Total liquid assets $414
Total assets $8,275
Total current debts $2,069
Total net worth $2,896
Total cash surplus $163.6667
Income after taxes $1,342
Total monthly loan payments $295
Monthly gross (before-tax) income $1,636.6667

Answer :

Tundexi

Answer:

Solvency Ratio = Total Net Worth / Total Assets

Solvency Ratio = 2,896/8,275

Solvency Ratio = 0.3499698

Solvency Ratio = 35.00%

Liquidity Ratio = Total Liquid Assets / Total Current Debts

Liquidity Ratio = 414/2,069

Liquidity Ratio = 0.20009667

Liquidity Ratio = 20.01%

Savings Ratio = Cash Surplus / Income After Taxes

Savings Ratio = 163.6667/1,342

Savings Ratio = 0.121957303

Savings Ratio = 12.20%

Debt Service Ratio = Total Monthly Payments / Monthly Gross Income

Debt Service Ratio = 295/1636.6667

Debt Service Ratio = 0.180244396

Debt Service Ratio = 18.02%

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