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    I've prepared a balance sheet, income statement and I know most of it. But how do I start it, get things rolling? Any ideas on what structure to use ?
    Like I've found their net worth to be 6300 pounds and income statement is -15.



    Your cousin, Alex Carters, and his wife, Emma, are both 30 years old. They have just got married. The Carters have so far relied on Alex’s salary. They had not been able to save any money as Alex’s income was just enough to cover their rent and their other expenses. They felt they needed to take control of their finances especially that they are planning to have a baby in the next couple of years. Last week, they received good news; Emma is hired for a part-time position at a store in Eldon Squares in Newcastle and due to start her job next week. This means she would be commuting between Stockton and Newcastle on a regular basis. They are very excited by the prospects of having additional cash inflows. They are now quite optimistic about their future and eager to start working toward their financial goals.
    The Carters’ combined income once Emma starts her job would be approximately £2,600 per month after taxes. With the expected cash inflows from Emma’s pay cheque, the Carters have already started spending more on various recreation activities for themselves. They have a credit card balance of £1,500. Although they currently own 2 cars and do not have any car loans, Emma’s car is very old and will need to be replaced soon. As she will be using her car a lot to travel to work, she would really like to buy a new car within the next year; she hopes to save £250 each month until she has accumulated savings of £3,000 to use for a down payment.
    Apart from the planned monthly savings on the down payments of the car, the Carters have no other saving plans. They know they need to save for their retirement over time. Yet they do not have a plan right now to achieve that goal because they are focused on saving for a new car.
    Reviewing their current account statement and credit card bills from the previous few months, Alex and Emma have identified the following monthly payments:
    Payments Amount
    Rent £800
    Cable TV £35
    Electricity and water £60
    Phone Bills £50
    Groceries £450
    Clothing £300
    Car expenses (insurance, maintenance and gas) £300
    Minimum payments on their existing credit card balance £20
    Recreation (including £40 Alex’s gym membership) £600


    To determine their net worth, they also assess their assets and liabilities, which include the following
    • £500 in cash
    • £1,200 in their current account
    • Furniture worth about £1,500
    • Emma’s car, which needs to be replaced soon, is worth about £600. Alex’s car is worth approximately £4,000
    • They owe about £1,500 on their credit cards
    The Carters have been living next door to you for nearly 10 years and have been quite close to you since you were young. They knew from your parents that you are taking a Personal Finance course at the university and came to ask for your advice.
    Based on what you have learned from your Personal Finance classes, prepare a written report on your findings and recommendations for the Carters to help them reach their financial goals and prepare for a better future (financially). In particular, the Carters would like you to help them in the following issues (make appropriate assumptions in your discussion) and they would also appreciate any other advice you can give in regard to their personal finance. Evidence and numerical examples must be provided where appropriate to support your arguments/advices.
    • Evaluate their financial health and identify the suitable financial goals and describe how to achieve those goals, how to implement the plans for each goal and how to evaluate the plan for each goal.
    • Using the information in the case, evaluate their financial situation using financial statements and ratios and advice on how these can be improved. Comments on these findings and the level of their net worth and how this could change.
    • Based on the financial statements that you have prepared, advice them on how likely they could achieve their goals and how they can improve their financial situation to meet the goals you have set for them. Help them to prepare budgets and revise the relevant personal financial statements appropriately following your recommendations.
    • Advice them on the aspect of savings. If they were able to save some money, what would you advice them to do with their savings for their goals. Browse through some websites (such as Barclays or HSBC, etc.) and compare different savings options and provide them with your suggestions on which option they take. Show the evidence of comparing among various accounts in Appendix.
    • Assuming that they want to put their money into savings account earnings 5% on the interest. Meanwhile, their credit card with the balance of £1,500 is charging them 18%. They want you to help them evaluate the return they are receiving from their savings versus the interest expenses they are accruing on their credit card. Should they continue making minimum payments on their credit card or should they use money from their savings to pay off the credit balance? How are their credit card decisions related to their budget?
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    (Original post by TuckingFypo™)
    Assets first, and then liabilities. I think.

    I should be more certain, but.. I'm not. :dunce:
    Disappointing answer, but I suppose ur sig pic makes up for it :cool:
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    bump
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    hmmm
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    Income statements are easy.

    Start with what they have coming in (so add up what they have earned over the year) then work through your case taking away everything they spent (make sure everything has a line of its own, it will keep it clearer), so rent, heat, credit card.

    Balance sheet comes next. Start with non-current assets, move to fixed assets. Current liabilities then non-current liabilities. Make a note of your working capital, net assets, net liabilities and so on, then match the equity. Remember the accounting equation (A-L=C, or L+C=A).

    I'd also recommend doing a cash flow statement and a forecast, if you've done those.

    Then you can start using that information to work out your ratios etc. If you need any help, quote me, but you have made me late for audit (I can't resist answering questions!).

    Jessica x
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    (Original post by Ice_Queen)
    Income statements are easy.

    Start with what they have coming in (so add up what they have earned over the year) then work through your case taking away everything they spent (make sure everything has a line of its own, it will keep it clearer), so rent, heat, credit card.

    Balance sheet comes next. Start with non-current assets, move to fixed assets. Current liabilities then non-current liabilities. Make a note of your working capital, net assets, net liabilities and so on, then match the equity. Remember the accounting equation (A-L=C, or L+C=A).

    I'd also recommend doing a cash flow statement and a forecast, if you've done those.

    Then you can start using that information to work out your ratios etc. If you need any help, quote me, but you have made me late for audit (I can't resist answering questions!).

    Jessica x
    Thanks for the help although its already done (this was due the next day! )

    Sure, will quote u on my next assignment
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    (Original post by The_Timepasser)
    Thanks for the help although its already done (this was due the next day! )

    Sure, will quote u on my next assignment
    Actually, I helped you the day after, so theoretically it was still possible for it to be useful :p:
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    (Original post by Ice_Queen)
    Actually, I helped you the day after, so theoretically it was still possible for it to be useful :p:
    oh well I should've come back to check TSR!
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    (Original post by Ice_Queen)
    Actually, I helped you the day after, so theoretically it was still possible for it to be useful :p:
    There u go ...I dont understand the bit abt monopolist. Help

    Show that:
    a) a business operating in an industry of perfect competition has a supply curve which is identical to its marginal cost curve above its average variable cost yet a monopolist has no supply curve;
 
 
 
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