The first thing that comes to mind when looking at Klinton's financial statement is that he has a $790 cash deficit. Meaning that on a monthly basis he has $790 worth of debt that he can’t afford to pay. This cash deficit could lead to a reduced credit score and future financial burdens if he can’t reduce his monthly variable expenditures.
The condition of Klinton’s financial health is low. I believe this to be the situation because although he has enough monetary income to match his current bills he could quickly be in a financial burden if he continues to spend frivously on gifts and miscellaneous purchases. Given the results of from the financial ratios he will only be able to take care of 75% of his current spending habits if he was to lose his income. Also, the money that Klinton uses to cover his extracurricular expenses could be placed into his IRA contribution to help aid in his future retirement or saving’s account to build up an emergency fund. …show more content…
The Medium priority debts are child support, federal student loans, credit card debt, and medical bills. The Low priority debts are the boat loan. I decided to rank Klinton’s debt in this manner due to his basic needs being given the highest priority. The Medium priority items are those that are not basic needs but are important to maintaining a positive credit ratings. The lowest priority items are those items that I consider to be wants and intangible needs. Thus if Klinton decided to get rid of these debts altogether he would still be able to financially survive and save towards