Anne works full time and earns $3,475 per month before taxes and other payroll deductions. Anne also works a part-time job on the weekends. Anne earns $800 per month (before payroll deductions) from her part-time job. Anne’s income taxes and other payroll deductions are $750 per month, in total, for both jobs. Anne earned $100 in interest in her savings account in September 2023.

A summary of Anne’s assets and liabilities on September 30^th , 2023 were:

Liquid Assets: $45,000

Total Assets: $375,000

Current Liabilities: $85,000

Total Liabilities: $180,000

Anne wants to obtain a better understanding of her expenses and so decided to track them on a spreadsheet for the month of September.  

A copy of the spreadsheet is included below.   

Expense For the Month of September, 2023	Amount ($)
Rent	1,200
Rogers Cable	175
Hydro/Electricity	100
Water	155
Cell Phone	110
Food/Groceries	500
Car Expenses (Gas, insurance, etc.)	350
Medical Insurance	200
Clothing/Personal Items	575
Gym Membership	100
Entertainment Expense	350
Monthly Living Expenses	3,815

REQUIRED:

• Using the information above, calculate Anne’s Net Cash Flow for the month of September 2023. Show your detailed calculation. (11 Marks)
• What can you conclude from Anne’s Cash Flow Statement for September? Provide two conclusions about Anne’s cash flow. (4 Marks)

 

PART II  Ratio Analysis (Out of 9 Marks) 

Use the information in Part I above to:

• calculate the following financial ratios for Anne’s account (6 Marks):
• Current Ratio
• Liquidity Ratio
• Debt-to-Asset Ratio
• Explain the results of each of the ratio calculations above. (3 Marks)