Puneet and Theresa Chatterjee are both twenty$-$eight years old and have a two$-$year old child, Edward. They have asked you to construct financial statements based on the information provided below. Use this information to calculate the following financial ratios: Current Ratio Emergency Fund Ratio Savings Ratio Debt Ratio Long$-$term Debt Coverage Ratio Debt$-$to$-$Income Ratio Front End Mortgage Ratio Back End Mortgage Ratio Summarize the Chaterjees$$ financial situation based on your analysis of these financial ratios. Income and expense $($cash flow$)$ information: Income: Puneet and Theresa earned $95,000$ in salary. Puneet earned $$50,000$ as a data analyst, and Theresa made $$45,000$ as a nursing supervisor. Puneet and Theresa also received $$35$ in interest from their money market account, which they reinvested. Taxes: Their W$-2$ tax statements indicate that they paid $$7,267$ in FICA taxes, $$10,500$ in federal income tax, and $$2,900$ in state income taxes. Real estate taxes on their home were $$1,800.$ Personal property taxes on the two vehicles they own equal $$360.$ Insurance: Medical insurance is provided by their respective employers; however, they must pay a portion of the premium, which amounted to $$1,400.$ Their personal automobile policy premiums totaled $$1,600.$ Homeowner$$s insurance premiums for the year were $$1,200.$ Puneet and Theresa own term life insurance policies, and they paid $$500$ in premiums for both policies. Loan payments: Mortgage payments amounted to $$20,253.$ Auto loan repayment for their two vehicles totaled $$6,600.$ Student loan payments for Theresa$$s student loans when she was working toward her master$$s degree in nursing equal $$4,500$ for the year, and the boat payments for the year equal $$3,112.$ Savings payments: Puneet and Theresa contributed $$4,000$ to their retirement accounts, $$1,200$ to an education fund for their child, and $$1,200$ to their money market account, and the $$35$ in interest that they reinvested in the money market account. Daily living expenses: Puneet and Theresa estimate, based on checking account records and credit card statements, that they spent approximately $$4,000$ on food at home. Clothing expenditures were estimated to be $$1,800$; laundry and dry$-$cleaning expenses were $$300$; and personal care expenses were $$1,000.$ Day care for Edward was $$6,000.$ Expenses for gas and maintenance for their vehicles were $$2,000.$ This year there were no auto repair costs. Variable expenses: They estimate that they spent $$1,600$ on entertainment, which includes dining out and admission charges for plays, movies, and sporting events. Puneet and Theresa also spent $$1,500$ on recreation and travel, which is how they categorize vacation expenses. Charitable contributions for the year totaled $$2,000.$ Hobby expenses were $$360$ for the year. Gifts for family and friends throughout the year were $$2,000.$ Utilities: Utilities for the year cost $$4,000,$ which included $$1,840$ for gas and electricity, $$720$ for water, and $$1,440$ for telephone, Internet access, and cable television. $84$ Case Approach to Financial Planning Home maintenance and improvements: They spent $$1,200$ annually in this category. Miscellaneous expenses: Unreimbursed medical expenses amounted to $$300.$

Question $2$

What is their current ratio?

Question $3$

What is their emergency fund ratio $($in months$)?$

HINT: For this calculation, Months Living Expenses is limited to debt service, insurance premiums, and daily living expenses. Taxes and savings can

be assumed to stop during any out$-$of$-$work periods.

Question $4$

What is their savings ratio?

Provide an answer in terms of a percentage. So$,$ if you calculated $\mathrm{.}055$ report the answer as $5\mathrm{.}5.$ You can leave the $\%$ sign off.

Question $5$

What is their debt ratio?

Provide an answer in terms of a percentage. So$,$ if you calculated $\mathrm{.}055$ report the answer as $5\mathrm{.}5.$ You can leave the $\%$ sign off.

Question $6$

What is their long$-$term debt coverage ratio?

Question $7$

What is their debt$-$to$-$income ratio?

Provide an answer in terms of a percentage. So$,$ if you calculated $\mathrm{.}055$ report the answer as $5\mathrm{.}5.$ You can leave the $\%$ sign off.

Question $8$

What is their front$-$end mortgage ratio?

Provide an answer in terms of a percentage. So$,$ if you calculated $\mathrm{.}055$ report the answer as $5\mathrm{.}5.$ You can leave the $\%$ sign off.

Question $9$

What is their back$-$end mortgage ratio?

Provide an answer in terms of a percentage. So$,$ if you calculated $055$ report the answer as $5\mathrm{.}5.$ You can leave the $\%$ sign off.

Question $10$

Provide a short analysis of each of the financial ratios measured above compared to the financial planning benchmarks. Copy the list below into

your answer and provide one sentence about your calculation and the benchmark.

a$.$ Current Ratio

b$.$ Emergency Fund Ratio

c$.$ Savings Ratio

d$.$ Debt Ratio

e$.$ Long$-$term Debt Coverage Ratio

f$.$ Debt$-$to$-$Income Ratio

g$.$ Front End Mortgage Ratio

h$.$ Back End Mortgage Ratio

Question $11$

$7$ pts

Based on the scenario, your calculations, the benchmarks