iven the following information, calculate the liquidity ratio:

**Note: Round your answer to 2 decimal places.**

Liabilities = $33,500

Liquid assets = $6,700

Monthly credit payments = $1,250

Monthly savings = $1,030

Net worth = $86,000

Current liabilities = $2,500

Take-home pay = $3,200

Gross income = $6,200

Monthly expenses = $3,840

The **liquidity ratio** measures a person's ability to cover their current liabilities using liquid assets. It is calculated using the formula:

\[
\text{Liquidity Ratio} = \frac{\text{Liquid Assets}}{\text{Monthly Expenses}}
\]

Given:
- Liquid assets = $6,700
- Monthly expenses = $3,840

Let's compute the liquidity ratio.# Re-defining the variables and calculating the liquidity ratio again

# Given values
liquid_assets = 6700      # Liquid assets
monthly_expenses = 3840   # Monthly expenses

# Liquidity Ratio formula
liquidity_ratio = liquid_assets / monthly_expenses
round(liquidity_ratio, 2)The liquidity ratio is **1.74**, meaning Brenda has enough liquid assets to cover approximately 1.74 months of her monthly expenses.

Would you like more details, or do you have any other questions?

Here are 5 related questions that might be useful:
1. What is considered a good liquidity ratio?
2. How can Brenda increase her liquidity ratio?
3. How does a low liquidity ratio affect financial stability?
4. What other ratios can help assess financial health?
5. How do liquid assets differ from total assets?

**Tip:** A liquidity ratio of at least 3 is often recommended to ensure you can cover several months' worth of expenses in case of emergencies.

Given the following information, calculate the liquidity ratio:

Liabilities = $33,500

Liquid assets = $6,700

Monthly credit payments = $1,250

Monthly savings = $1,030

Net worth = $86,000

Current liabilities = $2,500

Take-home pay = $3,200

Gross income = $6,200

Monthly expenses = $3,840

Learn how to calculate the liquidity ratio using the given financial data, including liquid assets and monthly expenses. This problem focuses on understanding financial ratios and their importance in personal finance. Ideal for students in Grades 11-12.

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