Presentation is loading. Please wait.

Presentation is loading. Please wait.

CHAPTER 3 FINANCIAL STATEMENTS, TOOLS, AND BUDGETS

Published byChristine Lynch Modified over 5 years ago

Similar presentations

Presentation on theme: "CHAPTER 3 FINANCIAL STATEMENTS, TOOLS, AND BUDGETS"— Presentation transcript:

1 CHAPTER 3 FINANCIAL STATEMENTS, TOOLS, AND BUDGETS
FALL 2012 Dr. David P. Echevarria All Rights Reserved

2 FINANCIAL STATEMENTS, TOOLS, AND BUDGETS
LEARNING OBJECTIVES Identify your financial values, goals, and strategies. Use the balance sheet and the cash-flow statements to measure your financial health and progress. Evaluate your financial strength and progress using financial ratios. Collect and organize the financial records necessary for managing your personal finances. Achieve your financial goals through budgeting. Dr. David P. Echevarria All Rights Reserved

3 FINANCIAL STATEMENTS, TOOLS, AND BUDGETS
IDENTIFYING FINANCIAL VALUES, GOALS, AND STRATEGIES How will you define financial success? Setting achievable financial goals Spending Risk Management (medical, disability, life, liability) Capital accumulation Dr. David P. Echevarria All Rights Reserved

4 FINANCIAL STATEMENTS, TOOLS, AND BUDGETS
How are wealth-building principles related to financial goals? What strategies make sense given your goals and wealth-building principles? Dr. David P. Echevarria All Rights Reserved

5 FINANCIAL STATEMENTS, TOOLS, AND BUDGETS
IMPORTANCE OF FINANCIAL STATEMENTS The Personal Balance Sheet Assets: monetary, real, financial Liabilities: installment debt (S-T, L-T), credit cards Net Worth: increase assets, reduce liabilities Dr. David P. Echevarria All Rights Reserved

6 FINANCIAL STATEMENTS, TOOLS, AND BUDGETS
Cash Flow Statement (Cash Budget) See table 3-3 on page 76 Income Expenses: fixed, variable Savings and/or Investments Surplus: Discretionary Disposable Income uses Dr. David P. Echevarria All Rights Reserved

7 FINANCIAL STATEMENTS, TOOLS, AND BUDGETS
TRACKING FINANCIAL PERFORMANCE Using Financial ratios Liquidity Ratio: ability to pay your bills Debt ratio: total debt to total assets Debt Service to Income Debt payments to disposable income Investment assets to Total assets Dr. David P. Echevarria All Rights Reserved

8 FINANCIAL STATEMENTS, TOOLS, AND BUDGETS
Importance of keeping Good Records Helps in achieving goals Useful at tax time Removes guesswork when planning the future Dr. David P. Echevarria All Rights Reserved

9 FINANCIAL STATEMENTS, TOOLS, AND BUDGETS
COMPONENTS OF BUDGETING Living expenses Debt service (especially credit card and installment purchases) Savings/investments HOMEWORK Do the Math: 2, 5 Dr. David P. Echevarria All Rights Reserved

Download ppt "CHAPTER 3 FINANCIAL STATEMENTS, TOOLS, AND BUDGETS"

Similar presentations

Mrs. Wilson Business Essentials. This lesson provides information about money management basics and the reports used to measure financial progress.

Mrs. Wilson Business Essentials. This lesson provides information about money management basics and the reports used to measure financial progress.
Money Management Strategies

Money Management Strategies
Money Management A system of planning for spending based on expected income.

Money Management A system of planning for spending based on expected income.
© 2013 Pearson Education, Inc. All rights reserved.2-1 Measuring Your Financial Health and Making a Plan.

© 2013 Pearson Education, Inc. All rights reserved.2-1 Measuring Your Financial Health and Making a Plan.
Measuring Your Financial Health and Making a Plan.

Measuring Your Financial Health and Making a Plan.
Chapter 3 Quiz TODAY.

Chapter 3 Quiz TODAY.
Current Ratio Calculate the current ratio using the information above. Remember, the current ratio is Monetary Assets/Current Liabilities.

Current Ratio Calculate the current ratio using the information above. Remember, the current ratio is Monetary Assets/Current Liabilities.
16 Money Management and Financial Planning

16 Money Management and Financial Planning
1 Chapter 2 – Measuring Financial Health Important parts Construct & interpret financial statements Budgeting Record-keeping Financial planners.

1 Chapter 2 – Measuring Financial Health Important parts Construct & interpret financial statements Budgeting Record-keeping Financial planners.
Chapter 9 – Incremental Cash Flow  Learning Objectives  Understand the importance of cash flow  Calculate the operating cash flow  Produce a Sources.

Chapter 9 – Incremental Cash Flow  Learning Objectives  Understand the importance of cash flow  Calculate the operating cash flow  Produce a Sources.
Personal Finance Garman/Forgue Ninth Edition

Personal Finance Garman/Forgue Ninth Edition
Money Management Strategies

Money Management Strategies
Money Management Skills

Money Management Skills
© The McGraw-Hill Companies, Inc., 2001. All Rights Reserved. Irwin/McGraw-Hill Chapter 3 Money Management Strategy: Financial Statements and Budgeting.

© The McGraw-Hill Companies, Inc., All Rights Reserved. Irwin/McGraw-Hill Chapter 3 Money Management Strategy: Financial Statements and Budgeting.
2 Money Management Skills

2 Money Management Skills
Chapter 2 Money Management Skills Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin.

Chapter 2 Money Management Skills Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin.
Unit 2: Measuring Financial Health. Learning Objectives O Define asset, liability, and net worth. O Calculate the level of net worth using a balance sheet.

Unit 2: Measuring Financial Health. Learning Objectives O Define asset, liability, and net worth. O Calculate the level of net worth using a balance sheet.
Monday January 30 th Personal Finance 1. Journal: 5 reasons you need to budget Journal Which reason is most important to you and why? How can you start.

Monday January 30 th Personal Finance 1. Journal: 5 reasons you need to budget Journal Which reason is most important to you and why? How can you start.
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Analyzing Year End Financial Reports to Evaluate the Business Objectives:  The student will describe five key factors of year end financial analysis 

Analyzing Year End Financial Reports to Evaluate the Business Objectives:  The student will describe five key factors of year end financial analysis 

Similar presentations

Ads by Google