January 2009 Financial Ratios
It’s a new year and we’re off to a decent start. We have set some lofty goals for Networth Growth and our Emergency Fund ratio and we’re off to a nice start.
As you can see I’ve added the “Networth Growth” category to our ratios this year so it will be easier to track our month-to-date and year-to-date progress on our goal. I am thinking about adding a 3rd ratio under this category that would be lifetime-to-date growth (LTD), but we’ll see….I don’t know if that would really tell us much. With that said, we saw a decent increase in our networth of just over 3% which is a little below our goal of 4.16% growth each month.
Now that we have a house, we’ve finally have a long-term debt coverage ratio. This ratio basically says that at our currently monthly expense amount we could pay our debt obligations 1.24 times over. Because our mortgage makes up so much of our monthly expenses, this is pretty low. Over time we’d like to see an upward trend.
*For an explanation of the different ratios and how they are calculated check out my Financial Ratios posts (Liquidity Ratios, Debt Ratios, Saving Ratios).
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