1. Bennie D Waller, Longwood University Personal Finance Bennie Waller wallerbd@longwood.edu 434-395-2046 Longwood University 201 High Street Farmville, VA 23901

2. Bennie D Waller, Longwood University Financial Statements

3. Bennie D Waller, Longwood University Measuring your financial health Using a balance sheet to measure wealth A snapshot of your financial status at a particular time. Assets you own Debt or liabilities you’ve incurred Your net worth or equity

4. Bennie D Waller, Longwood University Personal Balance Sheet

5. Bennie D Waller, Longwood University Income Statement

6. Bennie D Waller, Longwood University How People Spend their Money

7. Bennie D Waller, Longwood University Financial Ratios Financial ratios allow you analyze raw data in the balance sheet or income statement then compare it to targets. Ratios help you understand how you are managing financial resources.

8. Bennie D Waller, Longwood University Liquidity ratios Current ratio: current assets divided by current liabilities. Month’s Living Expenses Covered Ratio: current assets divided by monthly living expenditures – Should aim for 3 to 6 months of liquid assets

9. Bennie D Waller, Longwood University Other useful ratios Debt Ratio: total debt divided by total assets. Savings Ratio: income available for saving and investments divided by income available for living expenses

10. Bennie D Waller, Longwood University Record keeping Good record keeping is needs for accurate taxes. It allows for the tracking and sources of expenses. Financial planning software is available.

11. Bennie D Waller, Longwood University Thank You