Homework

Financial Plan - Financial Statements

Continue with your financial plan.   Your financial plan should be a professional looking document.  I expect you to follow something like the outline below.  Include other items, if you think appropriate. 

Do the assignment at the end of Chapter 2 - Building Your Own Financial Plan.  You should create a personal balance sheet and income (cash flow) statement.  If you do not want to share your personal data, create a version for yourself, modify it to reflect a "typical" person, and give the later to me.  The major value in doing this assignment is for you to understand your current financial situation. 

NOTE: You should incorporate the financials into your financial plan using this template.

The cash flow statement in the text has only a few categories of expenses.  I'd like to see more detail with more expense categories, such as gifts, vacation, tuition, school supplies, etc. 

You may do this using a text editor, such as Word or enter the information in an Excel spreadsheet.  

In addition to what is in the text, I want you to do an analysis of your financials (or the 'typical' person).  Your analysis should address:
    - what is the savings rate?  Is it good?  How does it compare to the national average?
    - how could the savings rate be improved?
    - how is the net worth?
    - what are your debt and liquidity ratios?  What does that tell you?

Your plan should now contain the information below.  Note, the items that are new from your draft are in red.

Financial Goals

Short-term Goals
    What are your needs?  Be specific about amounts and timeframes.
    How much money do you need?

Medium-term Goals
     What are your needs?  Be specific about amounts and timeframes.

Long-term Goals
     What are your needs?  Be specific about amounts and timeframes.
    Be sure to include an amount for retirement.

Career Goals

Career 1

Career 2

Current Financial Status

    Income statement
    Balance sheet 
    Analysis - what is your savings rate?  How is your liquidity and debt level?
       How does your savings rate compare with national average?
       How do your expenses compare to national averages?
       Will your current savings rate allow you to accomplish your goals?
       How could your savings rate be improved?

Grading Rubric:

  A B C D F
Professionalism Typed, stapled, no spelling or grammar errors.  Easy to read statements. Typed, stapled, no spelling, minor grammar errors.  Easy to read statements. Typed, stapled, minor spelling, grammar errors.  Easy to read statements.
Not stapled, spelling and grammar errors  Statements are not clear. Not typed or stapled.  Grammar and spelling errors.  Statements are not clear.
Balance Sheet Good, realistic list of assets and liabilities.  Realistic list of assets and liabilities.  Minimal list of assets and liabilities. Have expenses in liabilities. Assets do not equal liabilities plus net worth.
Income Statement Good, detailed list of expenses . Good list of expenses. Moderate list of expenses.  Minimal list of expenses.  No detail.  Have liabilities in expenses. Minimal list of expenses.  No detail.  Missing savings.
Analysis Specific discussion of how much one could save by taking specific actions.

Will calculate debt and liquidity ratios.

Will discuss the savings rate and expenses and compare them to national averages.

 Specific discussion of how much one could save by taking specific actions.

Will discuss the savings rate and compare to national average.

 General discussion of ways one could save. Identification of minimal number of possible areas for saving. Identification of possible areas for saving but no discussion.