How Do You Prepare A Financial Statement?
Financial Statements are used to find the financial health of a company or of an individual. There are two basic statements to be considered. The Net Worth Statement is simply Assets (anything of value) less liabilities (anything owed to others). In the example picture I have listed all of the Assets, which in include your house, 401k, car, savings, and furniture. I then listed the accounts that are owed, including house, car, and Visa. Add up all of the Assets. Add up all of the Liabilities. Subtract the Liabilities from the Assets and you have the Net Worth. A positive net worth means you have more assets than you have debts. This is a good thing. A negative net worth means you have more debts than you have things of worth. Not so good. Another common finanical statement is the Cash flow statement where you list all of your income and then all of your expenses. This can be for a week, month, or year. In the example shown I’m using monthly increments. You will note that in the month o
