Review the financial statement

Review the financial statements of Victor and Maria Hernandez (Table 3-2 and Table 3-3) and the financial ratios on page 87 and respond to the following questions:

(a) How would you interpret their investment assets to total assets ratio? The Hernandez family appears to have too few monetary assets compared with tangible and investment assets. How would you suggest that they remedy that situation over the next few years?

(b) What are your thoughts on the Hernandez’s liquidity ratio? How might they address any issues you see?

(c) Comment on the couple’s diversification of their investment assets.

(d) The Hernandezes seem to receive most of their income from employment rather than investments. What actions would you recommend for them to remedy that imbalance over the next few years?

(e) The Hernandezes want to take a two-week vacation next summer, and they have only eight months to save the necessary $3,400. What reasonable changes in expenses might they consider to increase net surplus and make the needed $425 per month ($3,400/8)?

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