1Assets
Cash and otheritems with a monetary value
2Balance Sheet
A financial statement that reports what an individual or a family owns and owes; also called a net worth statement
3Budget
A specific plan for spending income
4Budget Variance
The difference between the amount budgeted and the actual amount received or spent
5Cash Flow
The actual inflow and outflow of cash during a given time period
6Cash Flow Statement
A financial statement that summarizes cash receipts and payments for a time period
7Current Liabilities
Debts that must be paid within a short time, usually less than a year
8Deficit
The amount by which actual spending exceeds planned spending
9Discretionary Income
Money left over after paying for housing, food, and other necessities
10Income
Inflows of cash to an individul or a household
11Insolvency
The inability to pay debts when they are due because liabilities far exceed the value of assets
12Liabilities
Amounts owed to others
13Liquid Assets
Cash and items of value that can easily be converted to cash
14Long - Term Liabilities
Debts that are not required to be paid in full until more than a year rfom now
15Money - Management
Day - to - day financial activities necessary to manage personal economic resources while working toward long-term financial security
16Net Worth
The difference between total assets and total liabilities
17Safe Deposit Box
A private storage area at a financial institution with maximum security for valuables
18Surplus
The amount by which actual spending is less than planned spending
19Take - Home Pay
Earnings after deductions for taxes and other items; also called net pay
20Formula for Net Worth
Net Worth = Total assets - Total liabilities
21Formula for Cash Surplus (or Deficit)
Cash Surplus (or Deficit) = Total inflows - Total outflows
22Formula for Debt Ratio
Debt ratio = Liabilities/Assets
23Formula for Current Ratio
Current Ratio = Liquid assets/Current liabilities
24Formula for Liquidity Ratio
Liquidity Ratio = Liquid assets/Monthly expenses
25Formula for Debt-to-payments Ratio
Debt-to-Payments Ratio = Monthly credit payments/Take-home pay
26Formula for Savings Ratio
Savings Ratio = Amount saved per month/Gross monthy income