Tuesday, May 20, 2008

So today We did practice exercises, which is the reason i volunteered to scribe.
First exercise is calculating the debt/equity ratio. What we do is add all the assets and liabilities.
question 1:
dave's assets:
$100,000 house
$20,000 car
$3,000 in bank
$4,000 near cash
$10,000 mutual funds
$3,000 in Canadian savings bond
$15,000 rrsp

Daves Liabilities:
$60,000 mortgage
$15,000 car loan
$4,000 credit card balance
$2,000 loan
total= $81,000

assets-liabilities= net worth
155,000-81,000= 74,000

Now to get the ratio we take liabilities subtract mortgage cause mortgage is one debt we would like to have.

81,000 - 60,000 = 21,000

now we take our liabilities subtract mortgage and divide it by our net worth

81,000-60,000/74,000 = 0.283

so daves liabilities are about 28% of his total net worth

So that was the first question, and the next question already has the answers on the next slide page so i don't think i need to go through it. Oh and our test is on Thursday so get your bob done.

the next scribe will be H20

No comments: