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Personal Financial Statement Basics

Simple Alliance, Kenya Limited


Personal Financial Statement

As you scrutinise your credit and debt statements month after month, you could get surprised about your overspending habits. Financial accounting skills will help you tackle this issue.

Functions

Your personal financial statements help you to accounting for your expenditures and income. In this regard, the financial statements give you a view of your fiscal situation. They could be of help when you are undertaking budget planning.  Some specific uses of your personal financial statement include:

  • Measuring the progress you have made over time
  • Comparing your previous and past performance so as to determine what works best for your business  
  • They help lenders to study and evaluate your financial position

Types

The major kinds of personal financial statements include: 

  • Your personal balance sheet
  • Your personal cash flow statement

Personal Balance Sheet

Your personal balance sheet is a financial statement that gives you a general snapshot of your wealth a specific period in time. Basically, your personal balance sheet summarises your liabilities, your net worth, and your assets.

Personal Cash Flow Statement

You would use your personal cash flow statement to measure your cash outflows and inflows. This measurement activity gives your net cash flow for a particular period. Some useful personal cash flow statement items include:

  • Dividends from investments
  • Salaries
  • Interest from your savings accounts  
  • Capital gains from your sale of fiscal securities such as bonds and stocks

Sample

The model personal financial statement attached below summarises some important personal information. Some of the information outlined in the attached document include:  

  • A description of your personal assets and liabilities
  • Identification of your sources of income

Importance

From the attached sample personal financial statement, you can make a number of significant financial discoveries. You can:

  • Get an excellent idea of the information potential lenders will be looking for
  • Learn how your personal financial outlook will look in the eyes of potential lenders
  • Learn about the significance of meticulously filling in the personal financial statement form prior to submitting it to lenders

Unique Elements

The attached financial statements form offers you certain important benefits. It:

  • Gives a succinct organisation of detailed relevant personal fiscal factors
  • It offers an everyday summary for developing particular lenders’ personal fiscal financial statements
  • It gives a thorough program for your unresolved credit sources and your particular assets, such as life insurance, real estate, and securities
  • It offers an average approval provisions pertaining to the utilisation of the personal information for additional credit inquiries    
  • It offers typical provisions impressive an on-going responsibility on the candidate to update information

Your personal financial statements are the financial accounting tools you use to keep track of your expenditure.  The major financial statements include the balance sheet and the personal cash flow statement. You could use your personal statements to measure the progress you have made over time. You could also use the statements when comparing your previous and past performance so as to determine what works best for your business. The financial statements also help your potential lenders to study and evaluate your financial position.

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