| Sr.No | FINANCIAL RATIOS ANALYSIS | Particulars | Amount | Actual | Range |
|---|---|---|---|---|---|
1) BASIC LIQUIDITY RATIO | |||||
| Cash / Liquid Assets ______________________________________ Monthly Expenses | This ratio indicates one's ability to meet mandatory monthly expenses & other emergency needs | ______________________________________ | < 3 Adverse 3- <5 Moderate 3- <5 Moderate > 6 Less Optimum | ||
2) EXPANDED LIQUIDITY RATIO | |||||
| Liquid Assets ______________________________________ Net Worth | This ratio is required during emergency situations when it may not be possible to convert one's assets into cash | ______________________________________ | < 10% Adverse 10% - 15% Moderate > 15% - Optimum | ||
3) SAVINGS RATIO | |||||
| Savings ______________________________________ Gross Inflow | This ratio calculates the proportion of income an individual sets aside for savings out of the total income | ______________________________________ | < 10% Adverse 10% - 25% Moderate > 25% - Optimum | ||
4) DEBT ASSET RATIO | |||||
| Total Liabilities ______________________________________ Total Assets | This ratio calculates an individual's ability to pay liabilities out of assets. | ______________________________________ | < 30% - Optimum 30% - 50% - Moderate > 50% - Adverse | ||
5) SOLVENCY RATIO | |||||
| Net Worth ______________________________________ Total Assets | This ratio is used to measure the potential of long-term solvency | ______________________________________ | < 30% - Adverse 30% - 50% - Moderate > 50% - Optimum | ||
6) DEBT SERVICE RATIO | |||||
| A) | Annual Debt Payments ______________________________________ Annual Take-Home | These ratios are used to measure an individual's ability to make debt repayments out of Net Take Home | ______________________________________ | < 25% - Optimum 25% - 45% - Moderate >45% - Adverse | |
| B) | Non-Mortgage Debt ______________________________________ Annual Take-Home | ______________________________________ | < 7% - Optimum 7% - 15% - Moderate >15% - Adverse | ||
7) FINANCIAL INVESTMENT RATIO | |||||
| Invested Assets ______________________________________ Net Worth | This ratio is used to determine an individual's invested assets (excluding self consumption) out of total Net Worth | ______________________________________ | < 30% - Adverse 30% - 50% - Moderate >50% - Optimum | ||
Notes:
- Basic Liquidity Ratio - Cash / Liquid assets Will include only cash, liquid funds, savings & flexi accounts
- Expanded Liquidity Ratio - Will include assets such as MFs, Direct Equity, etc besides the liquid assets
- Savings Ratio - Only regular / systematic savings to be included. Gross inflow to include all inflows
- Debt Service Ratio - Annual Take Home will be calculated as Gross Income minus taxes & Contributions & Deductions from Salalry, etc
