Balance ratio = balance/after-tax income. Reference value: ≥30%. The balance ratio ≥30% indicates that you have a strong ability to control expenditure and savings accumulation, which can be used for investment to increase your net assets.
2. Ratio of investment to net assets
Ratio of investment to net assets = investment assets/net assets. Reference value: about 50%. Neither too high nor too low, so as to maintain a suitable growth rate without great risks.
3. Liquidation ratio
Liquidity ratio = net assets/total assets. Reference value: 60-70%. If it is too low, it means that there are too many debts, and once the debt maturity income drops, it will be insolvent; If it is on the high side, it shows that the solvency has not been reasonably applied to increase the scale of personal assets and needs further optimization.
4. Debt ratio
Debt ratio = total liabilities/total assets. Reference value: _50%. The formula shows that it is complementary to the repayment ratio, and its sum is 1, which also reflects the comprehensive solvency.
5. Pay-as-you-go ratio
Pay-as-you-go ratio = current assets/total liabilities. Reference value: about 70%. On the low side, it means that when the economic situation is unfavorable, the risk of debt avoidance cannot be quickly reduced; on the high side, it means that it pays too much attention to current assets, with low comprehensive rate of return and unreasonable financial structure.
6. Debt-to-income ratio
Debt-to-income ratio = current liabilities/current after-tax income. Reference value: 35%. Too high is prone to financial crisis. In other words, for families with mortgages, the monthly payment should not exceed 1/3 of the net income, but in fact, a large number of house slaves in China have exceeded the critical value, reaching an average of 66%.
7. Current ratio
Current ratio = ratio of current assets/monthly expenditure. Reference value: about 3. That is, keep three times the monthly expenses of the family as a daily reserve.
8. Insurance coverage
Amount insured = individual annual income after tax × 10. That is, insurance should ensure that family income will not plummet within 10 years when family members lose their ability to work.