After expenses and other cash outflows

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Reference no: EM132072727

Ali’s gross income is $50,000 a year. His employer withholds 30% to cover income taxes and other mandatory government deductions (e.g. EI). After expenses and other cash outflows, his annual surplus cash flow equals $5,000. He has $1,200 in a chequing account and $2,500 in a high interest savings account. His long-term liabilities equal $45,000 and non-liquid assets total $53,000. He carries a balance on his credit card of $3,300 every month. Identify the correct statements.

I. Ali’s net worth is $11,700.

II. Ali’s savings ratio is 14.29%.

III. Ali’s has $1.12 of current assets for each $1.00 of current liabilities.

IV. Ali’s liquidity ratio is 1.27.

V. Ali’s debt-to-asset ratio is less than

Choose the correct statements:

a) I, II and III

b) II, III and V

c) I, IV and V

d) II, III and IV

Reference no: EM132072727

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