Folks, We've got a Financial Problem (Page 2): Was teasing meant New York and that mayoral fool!!

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Folks, We've got a Financial Problem

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Nov 11, 2019 23:10:01 #

Wonttakeitanymore

Canuckus Deploracus wrote:

What c*******t country limits sugary drinks?

Was teasing meant New York and that mayoral fool!!

Nov 11, 2019 23:35:10 #

Canuckus Deploracus Loc: North of the wall

Wonttakeitanymore wrote:

Was teasing meant New York and that mayoral fool!!

Oh... Apologies... That went right over my head

Nov 12, 2019 06:55:05 #

ACP45 Loc: Rhode Island

Radiance3 wrote:

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In essence this assessment of higher value of assets and equity must still comply with GAAP operations. Raising of equity values does not provide permanent stability. However, it could provide a good financial statement that could present the ability to meeting financial obligations to lenders.

If this method was done to enhance the reputation of the elected officers, I would not advise to relying solely on that report because the values of property may not be stable.
E.g. In 2001-2005, democrats demand banks to allowing loan to low income to avoid discrimination.

E.g. The recession in 2007-2008-2009. These years have drastic effects downgrading values of homes and real estate particularly the homes bought during the 2005-06 where in the sub-prime lending was used. In other words the sub-prime did not require higher standards of credit ratings of the borrowers.
Low income and minorities were able to obtain this type of loans because the credit requirement standards were lowered for them. Thus millions of those low income were able to buy homes. After a year, millions of homes foreclosed cause they were not able to pay the loans, thus thousands of banks who allowed the sub-prime loan became bankrupt. Thus we have the recession 2007-2008-2009.

During the earlier 80's banks normally require that liabilities of the borrowers must not be more than 35% of their income.

Here’s what debt to asset ratio means:
When you’re a business i.e. you have your own business, your debt to asset ratio represents the total amount of debt you owe compared to your total income.

This determines how much lenders will be willing to lend you, so be aware of how much you owe to creditors.

If you’re an individual, the debt to asset ratio won’t be as relevant to you, but your debt to INCOME ratio will be. That’s the number representing the total amount of debt you owe compared to your income. E.g. 35% of our debts to income is required to obtain a lawn for buying homes.

Mortgage lenders, bank loans, and anyone giving you credit will take a look at your debt to asset-income ratio in order to determine how much they’re willing to lend to you.

============ br In essence this assessment of high... (show quote)

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Radiance, Please verify that this is what you meant to say:

Here’s what debt to asset ratio means:
When you’re a business i.e. you have your own business, your debt to asset ratio represents the total amount of debt you owe compared to your total "income".

Nov 12, 2019 09:06:07 #

Radiance3

ACP45 wrote:

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Radiance, Please verify that this is what you meant to say:
Here’s what debt to asset ratio means:
When you’re on a business i.e. you have your own business, your debt to asset ratio represents the total amount of debt you owe compared to your total "income".

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The debt to asset ratio represents a business in corporate capacity. Corporate represents various stock holders who own that company.
Measure debt here is debt to asset ratio.
If total asset of the company is $100 million.
Total debt is $40 million. Therefore $40 million/$100,000 =40%.
That means 40% of your assets are owned by the bank, and the 60% are owned by the stockholders.

If you are in business owned by single proprietorship. You alone, Debt to income ratio is to measure percent of your debts to the total income of your business.

For example: If your business has a gross income of $500,000 annually. If your debts owed (liability), amounts to $135,000.
Take the ratio of that by dividing total debt/total income.
That is represented by your financial statement(consist of statement of income, and statement of your balance sheet.)
Total debt/total income will give you the ratio of debt to income in percent.
E.g. Total debt $135,000.
Total income $500,000.
$135,000/$500,000
That will give you 35%. Meaning 35% of your business is owned by creditors. The 65% is owned by you, the owner.

When you obtain a loan from the bank, and if they set up this maximum requirement of 35% of your debt to income, they will lend you money. If the ratio is lower than 35% they'll even lend you more. But if your debt to ratio is higher than 35%, they won't allow you to barrow. You debt is too high for the bank's standard requirement. And you ability to pay loan is not guaranteed.
So, what you can do now, is check your financial statement of your individual proprietary business. Divide your total debts by your total income, and you'll get the debt to income ratio.
And if you want to obtain loan from bank, also prepare a cash flow report. They will check how your money, your cash receipts flow versus the debts or payments made on a periodic basis.

Accurate financial statement is always required. That is why for single proprietary business, to barrow from bank, they require an audited financial statement and your cash flow report. The purpose is to determine the probability of paying the loan.

Nov 12, 2019 10:53:15 #

Radiance3

ACP45 wrote:

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Misprint. The statement should be debt to income ratio. Apologize for that. That is for your personal business, (single proprietorship) not for the corporate.

Debt to asset belongs to the corporate business owed by various stockholder.
A corporation is considered a juridical entity, independent of its personality from the stock holders.
It can sue and be sued cause of its independent personality.
And when it is sued for none payment of debt, the bank or lender, can only go to the extent of the assets of the corporation.

Please don't hesitate asking other questions.

Nov 12, 2019 13:59:55 #

Auntie Lulu

Canuckus Deploracus wrote:

I don't find this shocking...

It is part of a trend...

Hopefully there will be no more bailouts...

Darwinian Economics anybody