Personal Finance 1st Edition by Jack R. Kapoor

Exercise 12

1. What are the main purposes of personal financial statements?

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2. What does a personal balance sheet tell about your financial situation?

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3. How can you use a balance sheet for personal financial planning?

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4. What information does a cash flow statement present?

Action Application Using a Web search or library sources, obtain information about the assets commonly held by U.S. households. How have the values of assets, liabilities, and net worth of U.S. consumers changed in recent years?

Step 1 of 3

(2) A personal balance sheet is a financial statement that reports what you own and what you owe. It helps to determine your current financial position using the following formula: