Financial Planning And Budgeting Assignment

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Reference no: EM133284794

Assignment - Financial Planning And Budgeting

LO1: To understand the concept of Financial Planning, Financial Planning Model and discover the strategies to reach the Financial Goals

LO2: To recognize the importance of Time Value of Money in Financial Planning and Budgeting

LO3: To calculate and interpret Current Asset Ratio and Gearing Ratio

LO4: To acknowledge the distinction between Real Income and Nominal Income

LO5: To understand the concept of insurance and learn about different types of insurance products

Question 1. a)What is Financial Planning? Elaborate the 4 stages of the financial planning model.

Question 2. a) Illustrate the strategies which could be used to reach the financial goals of an individual?

Question 3. Complete the Statement of Financial Position (Balance Sheet) given below, by filling up the missing values and comment on the calculated Current Asset Ratio and Gearing Ratio.

XYZ's Household Balance Sheet as on 31st December 2021

Assets		Amount(AED)	Liabilities		Amount (AED)
Cash and current account balance		25,000	Bills XYZ owe		15,000
Savings account balance(s)		20,000	Credit card(s)		5,000
Debts owed to XYZ and repayable within a year		5,000	Overdraft		2,500
Other liquid assets		10,000	Loan balances repayable within a year		15,000
			Other short-term liabilities		2,000
Total short term assets	C		Total short-term liabilities	D

Home		100,000	Mortgage balance on home		25,000
Other land and buildings		80,000	Other mortgages		3,000
Car(s)		60,000	Other loans repayable over more than one year		6,000
Household and personal possessions		20,000	Other Liabilities		1,000
Shares and share-based investment funds		5,000
Bondbased investment funds		6,000
Paintings, Antiques etc.		3,000
Debts owed to XYZ and not repayable within a year		2,000
Total other assets	E		Total other liabilities	F
Total assets	G = C + E		Total liabilities	H = D + F

Net worth	G - H		Gearing Ratio(percentage)	(H / G) × 100
Current asset ratio	C / D

Question 4. a) Differentiate between real income and nominal income.
b) Write a short note on different types of insurance products.

Question 5. a) What are the different strategies for managing risk and uncertainty?
b) What is insurance and what is the need to take out an insurance policy?

Attachment:- SSM Assignment Template.rar

Reference no: EM133284794

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