0 Spend

In order to understand your currently financial situation, you must provide financial statements below. These financial statement will give you a snapshot of your financial situation and it gives you a clear view of your spending habits, regarding your assets and liabilities.

1. Statement of net worth
a) Statement of net worth he difference between your assets and liabilities, including all liquid assets, equity in investments, equity in personal assets, and deferred income taxes, such as k401 and any retirement saving plan. This is the best single measurement of your financial condition and resources.
b) It helps to determine the ratio between your total assets and liabilities, usually the Equity ratio=total liabilities/total assets less than 0.5 is good.

2. Equity ratio for liquidity
The equity ratio for your liquid assets and short-term debts provides a measurement of your ability to pay short-term obligations. Usually short term debt/ liquidity assets less than 0.5 is good.

3. Equity ratio for investment assets
a) This ratio shows the level of your investments leveraging
b) The interest you pay on the loan is tax-deductible if money are borrow for investment purposes.

4. Statement for household expenditure
a) This is the expenses for thee cost of accommodation only including rent or the interest paid on your mortgage.
b) It is also for the cost to own a car

5. Statement of cash flow
It shows the total flow of cash over a period of time from all sources of income and expenses.

6. Balance sheet
This provides a snapshot of your financial situation and it gives you a overview of your spending habits.

I hope this information will help. If you need more information of insurance or series of articles of the above subject at my home page at:
http://medicaladvisorjournals.blogspot.com
http://lifeanddisabitityinsuranceunderwriter.blogspot.com/

All rights reserved. Any reproducing of this article must have all the links intact.

Kyle J. Norton