# Funded Ratio Calculator

# Introduction

Calculating the funded ratio is crucial for evaluating the financial health of a pension plan. This ratio assesses the ability of a pension fund to meet its long-term obligations. In this article, we’ll guide you on how to use a funded ratio calculator, providing accurate results.

## How to Use

To use the funded ratio calculator, follow these steps:

- Enter the current value of assets in the “Current Assets” field.
- Input the present value of liabilities in the “Current Liabilities” field.
- Click the “Calculate” button to obtain the funded ratio.

## Formula

The funded ratio is calculated using the following formula:

## Example Solve

Let’s consider an example:

- Current Assets: $500,000
- Current Liabilities: $300,000

## FAQs

**Q: What does the funded ratio indicate?**

**A:** The funded ratio represents the percentage of a pension plan’s assets compared to its liabilities, indicating its financial stability.

**Q: Can I leave the input fields blank?**

**A:** No, both “Current Assets” and “Current Liabilities” fields must be filled to obtain an accurate funded ratio.

**Q: Why is the result displayed as a percentage?**

**A:** Expressing the funded ratio as a percentage makes it easier to interpret, providing a clear snapshot of the pension plan’s health.

## Conclusion

Understanding the funded ratio is pivotal for assessing pension plan sustainability. Utilize the provided calculator to efficiently compute this ratio and gain insights into financial stability.