WEALTH MANAGEMENT

ASSIGNMENT: 01

NAME ALMAZ PASHA HS

REG NO 19MBAR0255

SECTION CF-1

__________________________________________________________________________

SCORE

FACULTY SIGNATURE
 Mr X (56 years) is a businessman owning a business in Construction materials and
transportation, I have analysed his person’s personal financial planning ratios and have interpreted
and would have given some suggestions on the basic of the ratios calculated

S.N RATIO CALCULATION INTERPRETATIO SUGGESTION

O N S
1 Liquidit = cash / Monthly expenses Anything around 4 to I would like to
y ratio Cash in hand-3,50,000 5 months can be suggest Mr X in
Monthly expenses- 80,000 considered to be having his
=3,50,000/80,000 good and in case of money invested
=4.375 Mr X he has a in mutual funds
liquidity ratio of 4.37 and fix a deposit
which is actually a and better
good liquidity ratio financial
and he could survive instruments
with this liquidity for which provide
months him Extra
money for the
future
2 Savings =Savings/Gross income The ideal ratio is 3-5 As Mr X Is
ratio Savings-38,00,000 And the ratio around his 50s
Gross income-12,00,000 depends upon the my suggestion to
=38,00,000/12,00,000 persons age his him is that he
=3.16 income and financial should start
goals in the case of saving for his
Mr X has some old ages and he
savings ratio is 3.16 should start
that is approximately investing on
a good savings ratio some
for a man of his age instruments
which give him
profit or interest
3 Debt =Total liabilities/Total assets Here Mr X has a I would suggest
Asset Total liabilities-1500000 little over borrowed ( Mr X to have a
ratio Total assets-1,95,00,000 liabilities ) compare little less
=5,00,000/1,95,00,000 to his value of the liability
=12.82% assets ,the person although
won’t face any although he has
solvency issues but repaying
looking at his age it capacity with his
would be Little risker assets
4 Debt =Short term liabilities/Total income Mr X has a debt I would like to
Servicin Short term liabilities-1,50,000 servicing ratio of suggest Mr X to
g ratio Total income-7,00,000 21.42% which is less make validated
=1,50,000/7,00,000 than 40% which has purchases using
=21.42% not cross the total his credit card as
death obligation he has and good
mark So Mr X has repaying
clear control over his capacity
short-term debts
5 Solvenc =Net worth/Total assets His overall Solvency As the solvency
y ratio Net worth-1,70,00,000 ratio is greater than ratio is above 15
Total assets-1,95,00,000 50% as The assets he on the other
 =1,70,00,000/1,95,00,000 owns are adequate hand it’s higher
=87.17% enough to manage so there’s no
the debts even in the further
future if he has any suggestions to
debts he could easily be given
clear them by using
his asset and also
solve if there is any
kind of emergency
6 Life =(Net worth+ existing life Here the ratio I would suggest
insuranc cover)/post tax salary indicates that the a person to have
e Net worth-1,70,00,000 person has provided one or more
coverage life cover-25,00,000 and life insurance for good life
ratio post tax salary-12,00,000 himself and his insurance as it’s
=(1,70,00,000+25,00,000)/12,00,00 family almost for 20 an Additional
0) years’ worth of Investment on
=16.25 expenses in His own life and
Adequate And far his families
more higher than the
ideal value