Verified Document

Personal Financial Situation The Management Of A Essay

Personal Financial Situation The management of a Fortune 500 organization utilizes financial statements to craft corporate strategy on a quarter to quarter and year over year basis. These statements: balance sheet, income statement, and statement of cash flows contain crucial financial information which explicates how successful a company has been and its potential future prospects. These same three statements can be used by me as I face financial scenarios which require examination of assets, income, and its sources.

Financial Statements

I will look to my financial statements as I seek to purchase a home, save for retirement, and contemplate starting a small business. A corporation's financial statements are contained in the annual report distributed to shareholders; my personal financial statement will contain the same data in a single page format. The balance sheet portion "summarizes a company's assets, liabilities and shareholders' equity at a specific point in time (Investopedia. N.D.); similarly the statement will identify what I own and owe. The income statement "measures a company's financial performance over a specific accounting period, summarizing how the business incurs its revenues and expenses" (Investopedia. N.D.). For me the income statement details their income earned...

Lastly, the statement of cash flows details "all cash inflows a company receives from both its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given quarter" (Investopedia. N.D.). My statement contains the sources of income and its eventual uses.
Home Ownership

I decide that I no longer wish to rent and instead choose to investigate the possibility of owning a home. After filling out the loan application at the local financial institution using information from my personal financial statement, the loan officer and I review the data. I work at General Electric as a network programmer making $48,000 a year, $4,000 gross a month; information found on the income statement. The bank requires a 20% down payment on the purchase of the $100,000 home. The financial statement (balance sheet) indicates that I have $25,000 in savings which can be used for this purpose. As for expenses and debt I have $1,200 monthly outflow which includes the new mortgage payment. The bank requires that monthly expenses do not exceed 36% of total income; I fall in line at 30%. After further review, a check of employment, and verification of the information on the application the mortgage loan is approved. The financial statements have provided the requisite information for my major life purchase.

Retirement Savings

Confidently set up in my new home two months later, I look at the financial statements to set up plan for saving for retirement. The statement of cash flows section details the $4,000 in income earned from GE, along with the expenses and bills of $1,200 which I pay on a…

Sources used in this document:
References

Investopedia. (N.D.). Balance Sheet. Investopedia. Retrieved June 13, 2011 from http://www.investopedia.com/terms/b/balancesheet.asp

Investopedia. (N.D.). Income Statement. Investopedia. Retrieved June 13, 2011 from http://www.investopedia.com/terms/i/incomestatement.asp

Investopedia. (N.D.). Statement of Cash Flows. Investopedia. Retrieved June 13, 2011

from http://www.investopedia.com/terms/c/cashflowstatement.asp
Cite this Document:
Copy Bibliography Citation

Related Documents

Financial Risk Management
Words: 2453 Length: 8 Document Type: Essay

Financial Risk Management Over the past decade, there have been tons of arguments over financial risk management especially if it is logically defensible in financial terms. Most risk managers have been able to observe both a better acceptance of their discipline along with a better enthusiasm on the part of businesses to employ the word "risk management." In the financing and banking business, nevertheless, these attitudinal changes have donated to

Management Principles Management Leadership Model Paper: Management...
Words: 4934 Length: 15 Document Type: Term Paper

Management Principles Management Leadership Model Paper: Management Principles Research suggests that everyone is a manager in their own way. For instance, everyone manages his finances, time, careers and relationships. These examples of managing are simple and straightforward. However, when concepts of management apply in organizations, management becomes complex. At such a point, it calls for extensive studying in order to understand the theoretical basis of management. The application of management and the enunciation

Financial Counseling Profile: Tackling Mid-Life
Words: 3022 Length: 10 Document Type: Term Paper

She is well-connected within the community and is confident that her business would be profitable within a year or two. She has a strong, charismatic personality and is also connected to Milwaukee's artistic community through her husband's architectural work restoring some of the city's beautiful historic buildings. She has a considerable portfolio, and occasionally sold stock photos or worked as a wedding photographer when she was in law school. Laura

Financial Planning Charting the Course:
Words: 15430 Length: 56 Document Type: Term Paper

Goal setting works well for simple jobs -- clerks, typists, loggers, and technicians -- but not for complete jobs. Goal setting with jobs in which goals are not easily measured (e.g., teaching, nursing, engineering, accounting) has posed some problems. Goal setting encourages game playing. Setting low goals to look good later is one game played by subordinates who do not want to be caught short. Managers play the game of setting

Financial Analysis Oracle Sells Software for Database-Management
Words: 1522 Length: 5 Document Type: Term Paper

Financial Analysis Oracle sells software for database-management and network products, application-development productivity tools, and end-user applications. Its principal product, the Oracle relational database-management system, runs on supercomputers, mainframes, minicomputers, microcomputers, and personal computers. The firm also offers consulting and systems-integration services. Foreign sales make up about 50% of revenue. Oracle sees the wisdom in managing business data. Oracle also offers business applications for data warehousing, customer relationship management, and supply chain management.

Financial Standards and Reporting Process of Germany and Its Effects...
Words: 2690 Length: 10 Document Type: Research Paper

Financial Standards Reporting standards for financial transactions have been varied with regard to countries and companies across the globe for many years. This fact has made it difficult for transactions to be reported with any great degree of accuracy. This was especially true in Germany where there was no true German GAAP. What the rest of the world has considered the German GAAP, the GoB, was actually comprised of here say

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now