Evaluation of Personal Financial Statement
Most of the problems are faced by a person while using the bank or the credit card and they are shocked by the statements by seeing the amount they have spent which is more than their expenditure and they thought. To overcome all these problems one has used the accounting method for their income and the expense by the financial statements. It is used to show the condition of your finance and thereby it helps in the budgeting.
Types of financial statement
- The personal cash flow statement
Net cash flow of yours is measured by the inflow and the outflow of the cash in a particular period of time and it is called the personal cash flow statement. Here the cash inflow represents the salary, interests, dividends and the capital gains from the stock or bonds and also the finance from the assets. Whereas the cash outflows are rent, utility bills, groceries, gas and by the entertainments.
- Personal balance sheet
At a specific period of time, the personal balance sheet represents the overall wealth. Wealth represents the assets, liabilities and net worth.
There are three types of assets called liquid assets which can be turned in to the cash easily without the loss of the value by selling, large assets such as the cars, houses, and furniture. The market value of these is used in the balance sheets and the investments such as the stocks, CDs, mutual funds, etc.
What you have owned is called the liabilities. They are the current bills and the purchase bills of house, cars, etc.
- Net worth
The difference between the owners and what you have to owe is called the net worth. The negative net worth represents the more owe than the owner. By increasing the wealth or by decreasing the liabilities the net worth will be increased. QProfit System review is given by the experts and the link provides information about the personal financial statement.
The tools are provided by the personal finance statement to spend and to raise the net worth. The separate pieces for the financial statement work together and therefore it helps to increase the net worth.
You have to analyze your habits in spending the money if you have the cash flow in the negative. By this, you can increase your cash flow in to positive.