ratios Flashcards
1
Q
net wrth
A
= Total Assets – Total Liabilities
2
Q
Debt ratio
A
= Liabilities / Net Worth
* want high, 2 is good
3
Q
current ratio
A
= Liquid Assets / current liabilities
4
Q
debt payment ratio
A
= Monthly Credit Payments / Take Home Pay
*how much earnings goes to debt
5
Q
savings ratio
A
= Amount Saved Per Month / Gross Monthly Income
*should be at least 10%
6
Q
liquidity ratio
A
=liq assets/monthly expenses
