# Back in the Black

## Back in the Black

Analysis of Debt to Income

Based on the data collected from 100 households with an average income of \$46,758 annually,
the average debt is \$11,770. Expressed as a ratio, the average debt-to-income (DTI) ratio
(debt/income) is 25%.
The DTI ratios are normally distributed.
Those households with the highest DTI ratio, defined as the top 3%, begin with those who are >
34.6%.
This sample cannot be used to make definitive conclusions for the US population; more samples
are required to provide reliable national figures.
The form of debt is not defined (student loan, credit card, mortgage). We have assumed that
since the data is from a consumer debt organization, it is exclusive of mortgage debt.

Conclusion
A DTI of more than 34.6% should be considered a serious debt problem and will include 3% of
households.

Histogram of Debt-to-Income
25

Frequency

20

15

10

5

0

0.12

0.18

0.24

0.30

Debt-to-Income

0.36

0.42

Descriptive Statistics: Debt, Income
Variable
Debt
Income

N
100
100

N*
0
0

Mean
11770
46758

SE Mean
406
1423

StDev
4063
14232

Minimum
2429
15514

Q1
8101
33103

Median
12077
48469

Q3
15131
58795

Maximum
20165
72709

Descriptive Statistics: Debt-to-Income expressed as a ratio
Variable
Debt-to-Income

N
100

N*
0

Variable
Debt-to-Income

Maximum
0.42986

Mean
0.25079

SE Mean
0.00507

StDev
0.05072

Minimum
0.11777

Q1
0.22346

Median
0.24533

Distribution Plot
Normal, Mean=0.25075, StDev=0.05072
8
7

Density

6
5
4
3
2
1
0

0.03
0.2507

X

0.3461

Q3
0.27891