Financial management tools-seven standard ratios

"Sort out finance and plan your life" ------ do you know the seven important financial ratios of your family?

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What I want to introduce to you today is the key to your family's financial situation-seven ratio standards. It can be said that your family's financial arrangements are well organized and wealth accumulation is easy. Let's take a look:

(1) balance ratio. It refers to the ratio of your household balance and income within a certain period of time (one year). It mainly reflects your ability to increase the level of net assets. Note that the income here refers to your household income after tax, because the income after tax is your real disposable income.

Balance ratio = balance/post-tax income. For example, if your family (Husband and Wife) has an annual post-tax income of 0.2 million yuan, an annual balance of 0.1 million yuan, and a balance of 0.1 million/0.2 million = 0.5, You can retain 50% of post-tax income in one year, it can be seen that your ability to control expenditures and accumulate savings is strong, and this part can be used for investment to increase your net assets.

(2) ratio of investment to net assets. It refers to the ratio of your investment assets to the net assets, reflecting your ability to increase the size of your net assets through investment.

Ratio of investment to net assets = investment assets/net assets. "Investment assets" include "Financial Assets" and "physical assets ". "Financial Assets" refer to bonds, stocks, funds, banking or insurance wealth management products, trust plans, etc., except for the current period, regular savings, and monetary funds of banks. "Physical assets" such as real estate investment and gold or collections for investment purposes. "Net assets" refers to the part of your total household assets after removing liabilities, including physical objects and non-physical objects.

This ratio should be kept at 0. 5. It is moderate, neither too high nor too low, so that the appropriate growth rate can be maintained without great risks.

(3) Liquidation rate. This ratio reflects your overall solvency.

Liquidation ratio = net assets/total assets. It is generally 0. 6---0. 7. If the debt is too low, it means that the debt is too large. If the debt's income decreases, the debt will be insolvent. If the debt is too high, it means that the debt payable capacity is not properly applied to improve the size of individual assets and further optimization is required.

(4) liability ratio. It refers to the ratio of total liabilities to total assets.

Debt ratio = total liabilities/total assets. The formula shows that it is in a complementary relationship with the liquidation ratio, and its sum is 1, which also reflects the overall solvency, 0. Below 5 is suitable.

(5) pay-as-you-go ratio. It is the ratio of current assets to total liabilities. Reflects the customer's ability to use assets that can be realized at any time to repay debts. "Current Assets" refer to "cash and cash equivalents", including cash, bank current periods, fixed deposits, and monetary funds. The standard value is 0. About 7. The low value means that the debt risk avoidance cannot be quickly mitigated when the economic form is unfavorable. The high value means that the current assets are paid too much attention, the overall rate of return is low, and the financial structure is unreasonable.

(6) Liability income ratio. The ratio of the debt principal and interest to the income of the same period. Indicators that reflect your financial status in a certain period of time (one year. For example, the ratio of the loan amount required for one year to your after-tax income for one year.

Debt-to-income ratio = current-year liabilities/current-year post-tax income. 0. 4 is the critical point, which is prone to financial crisis.

(7) liquidity ratio. It refers to the ratio of current assets to monthly expenditures. Shows the strength of your spending capacity. "Current Assets" has been mentioned in (V. Generally, the flow rate is 3. That is, the cost of your cash flow is kept within three months. Because liquidity is inversely proportional to profitability, strong liquidity has fewer benefits, and vice versa. Therefore, a certain amount of liquidity assets will be maintained, and the rest will be used to expand investment to achieve higher profits.

Well, after clarifying the above seven standard ratios, you can check whether your family's financial situation is reasonable, of course, all your household financial management goals should be properly configured according to the seven standards before they become reasonable. If you do not understand anything, you can contact me at any time. Of course, you can also tell the problem you want to solve. Zhang Lei hopes to help you effectively.

Let's get here today. Next time I will introduce specific cases to serve you with these seven standards :)

From: http://www.hengansl.com/blog/article.php? Tid_69.html