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Financial Essay

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Submitted By Momonuss
Words 278
Pages 2
-Read an article about money planning and wanted to learn more and make a plan. They want to enroll in a personal finance course at their local university. The Financial life cycle stage that best represents the Dumonts is stage 1, early years. This time is the stage of wealth. They should be planning on buying a house and saving more money and decreasing their expenses.
Their short term goals are to start a financial plan. Intermediate goals include buying their son braces and buying glasses for their kids. Long term goals include saving up for their childrens college.
Income statement
Balance Sheet
Ratios:
Current ratio (4,400/1,300)=3.39
Covered ratio (4,400/(58,397/12)=0.90
Debt ratio (27,725/78,300) =35%
Long term debt coverage ratio (62,100/9,732)=6.38
Savings ratio (62,100-58,397=3,703…(3,703/58,397-.06x100-6%) 6%
The family has a very low coverage ratio of .90 so they should decrease their savings to help. They need to cut down on expenditures to be able to have a better liquid assets. They do have health care and insurance and a good current income so thats good. They should also pay off their credit card payment as soon as possible.
The Dumonts do not currently have an emergency fund. They should plan on putting a certain amount of money in an emergency fund every months that could last them for 3-4 months just incase anything bad happens like if they lose their job. It is recommended that they pay off their credit card payments before creating an emergency

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