CC3152_L02_ch2+ - LECTURE 2 YOUR FINANCIAL STATEMENTS AND...

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CC3152 Principles of Financial Planning LECTURE 2 YOUR FINANCIAL STATEMENTS AND PLANS
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1-2 Learning Outcome 1. Understand interlocking network of financial plans and statements 2. Prepare a personal balance sheet 3. Generate a personal income and expenses statement 4. Use ratios to interpret personal financial statements 5. Use a cash budget to monitor and control spending
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1-3 1. Financial plans, budgets and statements facilitate financial planning! ! Link future goals and plans with actual results ! Provide direction, control and feedback
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1-4 The Interlocking Network of Financial Plans & Statements
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1-5 2. Personal Balance Sheet A statement of your financial position at one point in time. ! Assets ! Liabilities ! Net Worth
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1-6 Balance Sheet Equation Liabilities Assets = + Net Worth
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ASSETS LIABILITIES What you own : Liquid Assets (readily convert to cash) e.g. cash, checking account Investments (intangible financial assets) e.g. stocks, bonds Personal Property (movable property) e.g. car, jewelry, furniture Real Property (immovable property) e.g. land, house What you owe : Current Liabilities (due within 1 year) e.g. car loan, credit card balances, unpaid monthly bills Long-term Liability (due after 1 year or more)
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CC3152_L02_ch2+ - LECTURE 2 YOUR FINANCIAL STATEMENTS AND...

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