Estimating Debt. Jarrod has an old TV worth about $100. Jarrod's other assets total about $150. What is Jarrod's debt-to-asset ratio? What does this indicate about Jarrod's financial position?
Problem
Estimating Liquidity. Jarrod is a college student. All of Jarrod's disposable income is used to pay his college-related expenses. While he has no liabilities (Jarrod is on a scholarship), he does have a credit card that he typically uses for emergencies.
He and his friend went on a shopping spree in New York City costing $2,000, which Jarrod charged to his credit card.
Jarrod has $20 in his wallet, but his bank accounts are empty. What is Jarrod's liquidity ratio? What does this ratio indicate about Jarrod's financial position?