Financial Planning for Allen Family | Ratio Analysis, Tax Planning, Debt Management | Finance

Running head: FINANCE
Finance
Name of the Student:
Name of the University:
Author’s Note

1FINANCE
Table of Contents
Financial Plan..................................................................................................................................2
Step 1: Gather and Organize Relevant Qualitative and Quantitative Information..........................2
Step 2: Ratio Analysis.....................................................................................................................5
Step 3: Align Financial Resources and Goals................................................................................12
Step 4: Make an Overall Recommendation...................................................................................13

2FINANCE
Financial Plan
Step 1: Gather and Organize Relevant Qualitative and Quantitative Information
Qualitative Information (Goals)
 Building a Garage as soon as possible.
 Purchase a new car with the options which is provided by the employer.
 Full Payment of the Mortgage of the House as soon as possible.
 Providing half fees for education of two children in a well-established university.
Risk Tolerance
The case which is provided for Allen Family does not reveal any significant risks of that
sort but some can be assumed in the investments which is made by the family in retirement funds
and other kinds of funds. However, there is a risk of accidents in the line of work of Greg.
Completeness of information
In the balance sheet which is prepared for the financial paly, the amount which represents
car loans is missing and therefore the calculations for the same is shown below:
P/Y= 24
C/Y = 12
PV= $20000
I = 5%
N= 120
PMT= $341.91
The amount which is represented by mortgage payments is also not shown and the
computation for the same is shown below:
P/Y= 24

3FINANCE
C/Y = 1
PV= $28972
I = 6%
N= 24
PMT= $558.39
558.39*24 = $ 13401.36
The Allen Family
Cash Flow Statement (for prior year – to be updated)
Income (net)
Greg
Sharon
65,000
12,000
Total 77,000
Expenses (yearly)
Housing:
Mortgage payments 13400
Property taxes 3,000
Property insurance 1,200
Maintenance 3,000
Utilities (heat, phone, etc.) 6,500
Automobile:
Payments
Gas, insurance, repairs 4,445
Parental care 6,000
Health and hygiene 4,500
Groceries 4,000
Clothing 3,500
Miscellaneous (charitable donations, gifts, etc.) 9,000
RRSP contribution 2,000
Leisure and travel 4,000
Total Cash Outflow 1 =64545
Surplus (deficit) 12455