Overcoming Household Debt: Financial Ratio Analysis to Overcome Debt Problems in the Family

Abstract

Purpose: Household debt problems are one of the main challenges in managing family finances which can have a negative impact on financial well-being and relationships between family members. This research aims to explore the role of financial ratio analysis in overcoming household debt problems and provide practical guidance for families in managing their debt.

Methodology: The research method used is a literature study which includes academic journals, textbooks and related research reports. Financial ratio analysis is carried out to assess debt levels, repayment capacity, and the effectiveness of debt management strategies.

Findings: It is hoped that the findings from this research will provide insight into the factors that cause debt, effective debt management strategies, and the implications of family financial policies for debt reduction and prevention.

Research limitation: The paper needs to be developed to an applied study, such as ethnographic research by comparing two communities in different locations over a set period to evaluate the effectiveness of financial ratios in debt management strategies.

Research implication: It is hoped that the results of this research can provide practical guidance and recommendations for families experiencing debt problems in overcoming their financial problems and achieving sustainable financial stability.

Origanility: The paper proposes a debt strategy management through financial ratio approach.

Keywords: Household Debt, Financial Ratio, Strategic Debt Management