En Ramasamy and Puan Kamani are trying to figure out their current financial health. They...
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En Ramasamy and Puan Kamani 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 RM3,800 per month. They receive RM75 month in interest income from their investments.
Savings account : RM1,200
Current account : RM800
Credit card balance : RM1,000
Car; loan balance : RM12,000
Car; market value : RM8,000
Furniture; market value : RM2,000
Stocks and bonds : RM10,000
a.What is their current net worth? (1 Mark)
b.Assuming that they have no current bills other than those that are listed, what is their current ratio? (1 Mark)
c.What is their debt ratio? (1 Mark)
d.Calculating current ratio will answer the question, "Do I have adequate liquidity to meet emergencies?" What questions do these financial ratios help to answer?
i.Debt ratio
ii. Savings ratio (2 Marks)
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