Balance Sheet

ASSETS

January 1, 2013
50 3,000 9,550 3,200 15,800 960,000 50,000 65,000 2,035,000 50,000 500,000 600,000 1,150,000 3,200,800

Monetary Assets
Cash on Hand Savings Account Checking Account Rent Receivable Total Monetary Assets

Tangible Assets
House Personal Property Automobiles Total Tangible Assets

Investment Assets
Stock Portfolio Life Insurance Cash Value IRA Accounts Total Investment Assets TOTAL ASSETS LIABILITIES

Short-term Liabilities
Credit Card Debt Total Short-term Liabilities 500 500 10,000 10,000 10,500 3,190,300 3,200,800

Long-term Liabilities
Student Loan Total Long-term Liabilities Total Liabilities

Net Worth Total Liabilities & Net Worth

Cash Flow Statement

Income
Gross Salary Interest and Dividends Total Income

January 1, 2012- December 31,2012

500,000 10,000 510,000

Expenditures
Fixed Expenses Student Loan Payments Life Insurance Premium Automobile Insurance Total Fixed Expenses 10,000 25,000 15,000 50,000 5,000 3,000 6,500 10,000 24,500 74,500 435,500

Variable Expenses
Food Utilities Fuel Allowances Total Variable Expenses Total Expenses SURPLUS

Financial Ratios
Basic Liquidity = 2.55 = Monetary Assets 15,800 / Monthly Expenses 6,208

The Liquidity Ratio determines the number of months one could continue to meet their expenses by using only their monetary assets. A high ratio is desirable. A Liquidity Ratio of 2.55 indicates that one could survive 2.55 months without income. Asset-to-Debt = Total Assets / Total Debt 304.84 3,200,800 10,500 The Asset-to-Debt ratio compares total assets to total liabilities and provides one with a broad measure of their financial liquidity. The higher the ratio the better. This persons Asset-toDebt ratio of 304.84 means that their debts could be paid more than 304 times with their available assets. Debt Service-to-Income = Annual Debt Repayments / Gross Income .02 10,000 510,000 The Debt Service-to-Income ratio compares dollars spend on gross annual income and provides one with a view of their total debt burden. A ratio of 0.36 or less is desirable. This persons Debt Service-to-Income ratio is healthy. Debt Payments-to-Disposable Income = Monthly Non-mortgage debt Monthly Disposable repayments / Income 0 0 510,000 The Debt Payments-to-Disposable income ratio divides monthly disposable income into monthly debt repayments. A ratio of 14% or less is desirable. Since this person had no monthly non-mortgage debt repayments, their Debt Payments-to-Disposable Income ratio is zero. Investment Assets-to-Total Assets = Investment Assets Total Assets .36 1,150,000 3,200,800 The Investment Assets-to-Total Assets ratio compares ones investment asset value with their total assets. This ratio indicates how well one is doing on their financial goals. A ratio of 50% or higher is desired; however, it depends on the persons age. I believe that with as much money as this person has, their investments could be much larger.