Prather, 1990

Prather, C. G. (1990). The ratio technique applied to personal finance statements: Development of household norms. Financial Counseling and Planning, 1, 53-69.

The Ratio Analysis Technique Applied to Personal Financial Statements:
Development of Household Norms

Carole G. Prather1

Application of the ratio analysis technique to personal financial statements offers potential in
expanding insight into specific strengths and weaknesses of a family’s financial situation. Norms
for 16 ratios, based on data from the 1983 Survey of Consumer Finances are presented with
indications of how each ratio might be used to assess liquidity, solvency, or the general financial
position of a particular family. The norms may be used as a basis for comparison in assessing
specific components of a client’s net worth.

Key Words: Net worth, Ratios

To read and/or print this article in Acrobat format, you
may need to download a free Adobe
Acrobat Reader if you do not have one.
Click here to download Acrobat

Download article in Acrobat format

Previous affiliation

1. Carole G. Prather, State Extension Specialist, Department of Consumer and Family Economics, 162 Stanley Hall, University of
Missouri, Columbia, MO 65211