Liquidity and Debt. Based on the information in Problems 1 and 2, what is Ryan and Nicole's liquidity ratio? What is their debt-to-asset ratio? Comment on each ratio.
Problems 1:-
Asset Levels. Ryan and Nicole have the following assets:
|
Fair Market Value |
| Home |
$85,000 |
| Cars |
22,000 |
| Furniture |
14,000 |
| Stocks |
10,000 |
| Savings account |
5,000 |
| Checking account |
1,200 |
| Bonds |
15,000 |
| Cash |
150 |
| Mutual funds |
7,000 |
| Land |
19,000 |
What is the value of their liquid assets? What is the value of their household assets? What is the value of their investments?
Problems 2
Liability Levels. Ryan and Nicole (from problem 1) have the following liabilities:
| Mortgage |
543,500 |
| Car loan |
2,750 |
| Credit card balance |
165 |
| Student loans |
15000 |
| Furniture loan (6 months) |
1,200 |
What are their current liabilities? What are their long-term liabilities? What is their net worth?