Exam 2: Measuring Your Financial Health and Making a Plan

Which type of expenditure would probably be the hardest for an individual to track?

Patty currently has $9,000 in monetary assets. Her total annual living expenses are $36,000 per year. She has a $12,000 balance on her car loan and she has $45,000 in equity in her house. What is her month's living expenses covered ratio?

You know you are insolvent when

Liabilities are best described as

Which type of recordkeeping system is best to use with personal finances?

Hector and Maria Montez are trying to figure out their current financial health. They have listed the following items from their most recent statements. They will pay off their car loan in three years. Their gross household income is $3,800 per month. They receive $75 month in interest income from their investments. Savings account: $1,200 Checking account: $800 Credit card balance: $1,000 Car loan balance: $12,000 Car market value: $8,000 Furniture; market value: $2,000 Stocks and bonds: $10,000 -What is their current net worth?

The interest charge on your credit card statement should be listed on your personal income statement as a variable expense.

Which of the following are not typically found on a balance sheet?

A financial ratio by itself is of little value. To what can you compare your financial ratios to make them very valuable financial planning tools?

One's ________ is found by dividing monetary assets by current liabilities and is a good measure of liquidity.

Which financial planning document should you use to measure your current financial position?

A personal income statement is prepared

A(n) ________ is a book or notebook or a type of document found on a computer program in which one records ones expenditures.

Which of the following will be the best type of record keeping system to use in maintaining financial records?

Hector and Maria Montez are trying to figure out their current financial health. They have listed the following items from their most recent statements. They will pay off their car loan in three years. Their gross household income is $3,800 per month. They receive $75 month in interest income from their investments. Savings account: $1,200 Checking account: $800 Credit card balance: $1,000 Car loan balance: $12,000 Car market value: $8,000 Furniture; market value: $2,000 Stocks and bonds: $10,000 -Assuming that they have no current bills other than those that are listed, what is their current ratio?

Hector's month's living expenses covered ratio is currently 0.25 months. He just broke his leg and will not be able to work for 6 weeks. What most likely will Hector experience without a paycheck for 6 weeks?

Kareem currently has $6000 in monetary assets and currently has $2000 in current liabilities. What is his current ratio now?

Suppose that Doug's only assets are an automobile worth $10,000 and a checking account with a $5,000 balance. His only liabilities are a student loan balance of $12,000 and a balance of $9,000 on his car loan. What is his net worth?

Explain what goes on a balance sheet and its uses.

Suppose that Cheryl's only assets are an automobile worth $10,000 and a checking account with a $5,000 balance. Her only liabilities are a student loan balance of $2,000 and a balance of $8,000 on her car loan. What is her net worth?