PERSONAL BUDGET

Subject: Product and Brand Management

Paper Model: APA

Paper Type: Assignment

Total Words: 760

Document Outline

1.    Discuss aspects of the family’s current financial position, which needs to be addressed immediately, and over the long-term in the context of their primary financial goal.
2.    The family’s assets appear to be highly concentrated in illiquid assets, what tax-efficient strategies can the Joneses employ to correct this problem.
3.    Calculate the 16 financial ratios listed in the reference journal article for Fred and Lucy Jones.
4.    In your own opinion, which of these ratios would you rank as above, about, and below average for this family using the reference article as a guide?
5.    Which of these ratios should the Joneses work to improve on, in order to achieve their primary financial goal?
6.    What financial strategies can Fred and Lucy implement use to achieve goals 3 and 4? (At least one strategy for each goal)


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  1. Discuss aspects of the family’s current financial position, which needs to be addressed immediately, and over the long-term in the context of their primary financial goal.

The current financial position of the family i.e. Freud and Lucy Jones provides that they had cash and equivalents as $105000 for meeting the current needs of them. The financial assets of eth family were $ 2735050 and the personal assets were $ 993000. On the contrary, the liabilities of the family are termed to be $ 499634 whereas theirvalues of their total financial assets were43833050, whichmean that they had enough money for their spending or future investment ventures.

  1. The family’s assets appear to be highly concentrated in illiquid assets, what tax-efficient strategies can the Joneses employ to correct this problem.

There was high concentration of illiquid assets of the family therefore they might adopt withdrawal strategies from eth retirement accounts, limiting the taxation on the social security advantages taken by the family, avoiding heavy withdrawal of money from bank accounts, exploiting the lower capital gains by selling long held stocks by the family, etc.

 

 

  1. Calculate the 16 financial ratios listed in the reference journal article for Fred and Lucy Jones.

Ratios

Family

Ratio #1 Liquid Assets/Monthly Expenditures

11.09

Ratio #2 Liquid and other financial assets/Monthly expenditures

220.13

Ratio #3 Liquid Assets/Total Debt

0.29

Ratio #4 Liquid assets & other financial assets/total debt

5.68

Ratio #5 Liquid assets/non-mortgage debt

3.73

Ratio #6 Liquid assets/net worth

0.04

Ratio #7 Liquid & other financial assets/net worth

0.85

Ratio #8 Liquid assets/one year's payment on debt

0.29

Ratio #9 Liquid & other financial assets/one year's payment on debt

5.68

Ratio #10 Total debt/net worth

0.15

Ratio #11 Non-mortgage debt/net worth

0.01

Ratio #12 Net Equity + net tangible assets/net worth

0.96

Ratio #13 Net equity + net tangible assets minus home/net worth

0.78

Ratio #14 Net equity + net tangible assets/fixed dollar assets

5.18

Ratio #15 Net tangible assets/net worth

0.30

Ratio #16 Income generating assets/net worth

0.75

  1. In your own opinion, which of these ratios would you rank as above, about, and below average for this family using the reference article as a guide?

Ratios

Ranking

Ratio #1 Liquid Assets/Monthly Expenditures

Above Standard

Ratio #2 Liquid and other financial assets/Monthly expenditures

Above Standard

Ratio #3 Liquid Assets/Total Debt

Above Standard

Ratio #4 Liquid assets & other financial assets/total debt

Above Standard

Ratio #5 Liquid assets/non-mortgage debt

Above Standard

Ratio #6 Liquid assets/net worth

Not Available

Ratio #7 Liquid & other financial assets/net worth

Not Available

Ratio #8 Liquid assets/one year's payment on debt

Below Standard

Ratio #9 Liquid & other financial assets/one year's payment on debt

Above Standard

Ratio #10 Total debt/net worth

Below Standard

Ratio #11 Non-mortgage debt/net worth

Below Standard

Ratio #12 Net Equity + net tangible assets/net worth

Below Standard

Ratio #13 Net equity + net tangible assets minus home/net worth

Above Standard

Ratio #14 Net equity + net tangible assets/fixed dollar assets

Above Standard

Ratio #15 Net tangible assets/net worth

Not Available

Ratio #16 Income generating assets/net worth

Not Available

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