ASSIGNMENT ONE: FINANCIAL STATEMENTS & GOALS (Fall 2021) Due Date: November 10, 2021; assignments will be submitted electronically in D2L by midnight. One submission per team (of 2 and no more). Submissions will be graded for accuracy and formatting (see formatting guide in D2L). Hand in one MS-Word document with the last names of both team members in the file name. I will be happy to review formatting prior to the due date. Russell Norris would like your help in starting his financial plan. Review his financial and personal information before answering the following questions, 1. Using the October 1, 2021 asset and liability information: Develop a balance sheet for Russell. Assume Russell has no unpaid bills. Assets on a balance sheet should be listed at the current fair market value (FMV), not the purchase price. Liabilities are listed at the current outstanding balance. What is Russell's net worth? 2. Using Excel, create a Balance Sheet Pie Chart for Russell similar to the one in Chapter 3 of the textbook Using the income and expenditure information for 2020: Complete a statement of income and expenses (income statement) for Russell Date the statement January through December of 2020 Did Russell have a cash surplus or a cash deficit in 2020? What impact would the 2020 cash surplus (deficit) have on his net worth (increase net worth, or decrease net worth)? Create an Income Statement Pie Chart for Russell similar to the in chapter 3 of the textbook 4. Based on Russell's financial statements handed out in class, calculate the following ratios: - Emergency Fund ratio -- Debt to Total Assets Ratio - Net Worth to Total Assets Ratio -- Savings Ratio See your textbook and/or chapter 3 notes for guidance on what to include when calculating the financial ratios. Based on the information in the original case, the financial statements, and the ratios that you calculated List at least 3 positive aspects of Russell's current financial List at least 3 negative aspects of Russell's current financial status. status NORRIS CASE STUDY Spring 2021 Russell Norris is a young single father living in Las Vegas, NV. He is working as a manager for a casino operations company. He has been single for 5 years after the death of his wife, Harriett. Russell and Harriett had a son, Gabe, who lives with Russell. Russell fell in love with Las Vegas while attending UNLV and plans to remain there until retirement. Russell has also been dating a woman, Josic, for the past three years, and they are beginning to talk about marriage. Recently, a couple of Russell's friends have had some negative experiences (many lost their jobs because of the downturn in tourism, and another's parent suffered a debilitating stroke), which have caused Russell to take a closer look at his own financial management. Russell and Josie have not really discussed their finances, but Russell is sometimes irritated by the way Josie "pinches pennies." Josie will not buy anything unless it is marked down, and she always shops for the best prices, Russell does not understand this behavior because he knows she makes more money and has fewer bills than he does. Russell likes to spend money and he gets pleasure from buying Gabe and Josie gifts. Russell likes to stay in shape by training for triathlons. He travels a few times a year to various cities to compete in triathlon events Despite a successful career and much to Russell's chagrin, he has accumulated quite a bit of debt and has had difficulty meeting more than the required monthly payments. This is especially true in regard to the credit card he used to purchase new triathlon training equipment Russell has several goals. He feels that he should reduce his debt and establish an adequate emergency fund to be better financially prepared. Russell also wants to purchase a house since his current apartment is too small. Russell currently does not save regularly for retirement and he does not know much about investments. The money he has invested has mostly come from employer bonuses. He feels that he has plenty of time to save for retirement and plans to start saving in about five years. He doesn't feel this will make a significant difference in the amount of money he needs to save Motivated by financial concerns, Russell attended a financial seminar at his local bank. He received data gathering forms at the seminar and has filled them out as completely as possible. These forms are presented on the following pages. Read the information Russell has provided so that you can get acquainted with him PERSONAL FINANCIAL INFORMATION Climate Selamat IN NA Minh hth Date NA acquainted with him INFORMATION Cafermati N NA Birch M1991 in the NA Sar.Net CH are 55555555 sine. The NA Idee Art Wage Drive, A LA Laugas, NV XXXXXXXXXX Wedding Date CHILD Social Security Nam No. Gabe XXXX Birth Date 1/1/2014 XXX-XX- Degree BS EDUCATION School Russell Univ. Nevada, LV Business Marketing OCCUPATION Employer Position cars Russell Lucky Bets Casino Mgmt. Manager 2012-present Y LOCATION OF DOCUMENTS WBT Campo Mark sa duwe ce apply the tale ampilaya. a pics pot Nicole Miles hede Tule tocat Wells Fargonale depunt bus Curtification State Wallande deposits RETIREMENT INFORMATION nel Typen place plae plane eatinam hy Senary Olier SA Centre Bicos ASSETS - October 1, 2021 all ASSETS- October 1, 2021 RATE OF INTEREST MATURITY LOCATION BALANCE CHOCKINGC SAVINGS Mela 14.10 MONEY Am 012 MARKET ACCOUNT CDS Trade 517,000 E- Tek S NA NA 131 $1,200 CASH ON HAND SECURITY INVESTMENTS Shese A hehe 150 American 200 APLI 100 METTIVO NE 20 AUTOMOBILE(S) Model Cost Year Maks Current Valus 2018 Subaru $12,000 Cross Trek $20,000 REAL & PERSONAL PROPERTY Market Value (FMV) Replacement Value Fumiture and Stereo and TVs 15,000 $ 32,000 Clothing and Jewelry 3,750 $ 12,000 Computers, printer, etc 1.750 $5,250 Exercise Equipment 9.500 $ 14,100 Miscellaneous houschold items 5,000 $ 7.000 LIABILITIES pe AN SAC M M 2.9 M ACT Credit Cards -As of October 1, 2021 Se 2014 335 SI Credit Cards -As of October 1, 2021 La Fresnem 22 II SI 305515 MC se slala Tilf 35 Capital 21 535.5 512312 2020 INCOME Gross Income 1.200 - 650 76 Russell's Salary S142,000 Cash gifts recurring) Interest Dividends Capital gains distributions 349 Sale of Securities Fidelity Magellan Fund (FMAGX) 9,129 (non-recurring) 2020 EXPENSES Chowca M Trap CU TV and Kri "Today Ruslan Miche Sex See A. Mulae A Re France Taxholding 11 Social Security Testeding Casam 2012 Mis Malan Mini Pune ALAR W telecom Tuitim Barbeeld SO 11 et de Catal Indicates a discretionary expense. All others are non-discretionary Ka * Indicates a discretionary expense. All others are non-discretionary ** Calculate the blank fields from information in case. INSURANCE INFORMATION AUTO INSURANCE Den Subaren asy Nash IMA * 135 033 ACW 20 CW Tel Tv P. RENTER'S INSURANCE ured Ulter Alle Com w LIFE INSURANCE Tipe Late.com Mind YA 100.000 Cabe DISABILITY INSURANCE Policybel Eloyer Couper ay dactionele dhe My Bell Watang Pandey A days httlich Syan AS Podbye MEDICAL INSURANCE Pred AG Company Tir Care CHOD and Prime Sube sedar yaad e time be Bean Dr Route 40 Patacades Why Servis SCH $100 day Philip Kamehe Pedalupe 550 ESTATE PLANNING INFORMATION Russell would like to leave all of his assets to Gabe and leave him debt free in case of death. Russell would like his half- brother, Joe Norris, to be Gabe's legal guardian. Other than an up-to-date will, Russell has no formal estate plan FINANCIAL GOALS Short Range (1 Year) Pay of MasterCard and Capital One Card Reduce discretionary spending Purchase house Intermediate Range (1-5 Years) Establish an emergency fund Begin a college savings plan for Gabe Long Term (over 5 years) Start saving more aggressively for retirement Travel What is your single most important financial objective at this time? To reduce discretional spending FINANCIAL PRIORITIES Russell a LIVING paying monthly bills 1 b. PLEASURE: spending money C. RETIREMENT: invest in future 3 d. DISABILITY:protect against 4 c. DEATH: care for family E REDUCE TAXES spend to save g. INVESTING: accumulating assets 7 h. CHILDREN starting a family * Prioritized with 1 being most important and being least important OTHER INFORMATION 1. Are you able to save regularly? My contribution to my employer's 401(k) plan is the only regular savings 2. Do you invest regularly? I have dabbled in some investing but it's not regular. Usually, I try to invest bonuses or other windfalls received 3. Do you feel you are financially organized! Not really 4. Do you budget your money? No. I often overspend S. If you were to die, could your spouse handle the finances! N/A, but I believe Josie could handle the finances if we do get married 6. How do you feel about saving for retirement? It is very important 7. If you had an extra $5,000 what would you do with it? Take a vacation with Gabe. 8. How do you feel about taking investment risks? Awessive risk taker FINANCIAL GOALS Short Range (1 Year) Pay of MasterCard and Capital One Card Reduce discretionary spending Purchase house 3 Intermediate Range (1-5 Years) Establish an emergency fund Begin a college savings plan for Gabe Long Term (over 5 years) Start saving more aggressively for retirement Travel What is your single most important financial objective at this time? To reduce discretional spending FINANCIAL PRIORITIES Russell a. LIVING: paying monthly bills b. PLEASURE: spending money c. RETIREMENT: invest in future d. DISABILITY: protect against c. DEATHcare for family 1. REDUCE TAXES, spend to save 3. INVESTING: accumulating assets 7 1. CHILDREN: starting a family * Prioritized with being most important and being least important OTHER INFORMATION 1. Are you able to save regularly? My contribution to my employer's 401(k) plan is the only regular savings. 2. Do you invest regularly? I have dabbled in some investing but it's not regular. Usually, I try to invest bonuses or other windfalls received 3. Do you feel you are financially organized? Not really 4. Do you budget your money? No, I often overspend. 5. If you were to die, could your spouse handle the finances? NA, but I believe Josie could handle the finances if we do get married. 6. How do you feel about saving for retirement? It is very important 7. If you had an extra $5,000 what would you do with it? Take a vacation with Gabe 8. How do you feel about taking investment risks? Aggressive risk taker 9. How is your health? Very good. ASSIGNMENT ONE: FINANCIAL STATEMENTS & GOALS (Fall 2021) Due Date: November 10, 2021; assignments will be submitted electronically in D2L by midnight. One submission per team (of 2 and no more). Submissions will be graded for accuracy and formatting (see formatting guide in D2L). Hand in one MS-Word document with the last names of both team members in the file name. I will be happy to review formatting prior to the due date. Russell Norris would like your help in starting his financial plan. Review his financial and personal information before answering the following questions, 1. Using the October 1, 2021 asset and liability information: Develop a balance sheet for Russell. Assume Russell has no unpaid bills. Assets on a balance sheet should be listed at the current fair market value (FMV), not the purchase price. Liabilities are listed at the current outstanding balance. What is Russell's net worth? 2. Using Excel, create a Balance Sheet Pie Chart for Russell similar to the one in Chapter 3 of the textbook Using the income and expenditure information for 2020: Complete a statement of income and expenses (income statement) for Russell Date the statement January through December of 2020 Did Russell have a cash surplus or a cash deficit in 2020? What impact would the 2020 cash surplus (deficit) have on his net worth (increase net worth, or decrease net worth)? Create an Income Statement Pie Chart for Russell similar to the in chapter 3 of the textbook 4. Based on Russell's financial statements handed out in class, calculate the following ratios: - Emergency Fund ratio -- Debt to Total Assets Ratio - Net Worth to Total Assets Ratio -- Savings Ratio See your textbook and/or chapter 3 notes for guidance on what to include when calculating the financial ratios. Based on the information in the original case, the financial statements, and the ratios that you calculated List at least 3 positive aspects of Russell's current financial List at least 3 negative aspects of Russell's current financial status. status NORRIS CASE STUDY Spring 2021 Russell Norris is a young single father living in Las Vegas, NV. He is working as a manager for a casino operations company. He has been single for 5 years after the death of his wife, Harriett. Russell and Harriett had a son, Gabe, who lives with Russell. Russell fell in love with Las Vegas while attending UNLV and plans to remain there until retirement. Russell has also been dating a woman, Josic, for the past three years, and they are beginning to talk about marriage. Recently, a couple of Russell's friends have had some negative experiences (many lost their jobs because of the downturn in tourism, and another's parent suffered a debilitating stroke), which have caused Russell to take a closer look at his own financial management. Russell and Josie have not really discussed their finances, but Russell is sometimes irritated by the way Josie "pinches pennies." Josie will not buy anything unless it is marked down, and she always shops for the best prices, Russell does not understand this behavior because he knows she makes more money and has fewer bills than he does. Russell likes to spend money and he gets pleasure from buying Gabe and Josie gifts. Russell likes to stay in shape by training for triathlons. He travels a few times a year to various cities to compete in triathlon events Despite a successful career and much to Russell's chagrin, he has accumulated quite a bit of debt and has had difficulty meeting more than the required monthly payments. This is especially true in regard to the credit card he used to purchase new triathlon training equipment Russell has several goals. He feels that he should reduce his debt and establish an adequate emergency fund to be better financially prepared. Russell also wants to purchase a house since his current apartment is too small. Russell currently does not save regularly for retirement and he does not know much about investments. The money he has invested has mostly come from employer bonuses. He feels that he has plenty of time to save for retirement and plans to start saving in about five years. He doesn't feel this will make a significant difference in the amount of money he needs to save Motivated by financial concerns, Russell attended a financial seminar at his local bank. He received data gathering forms at the seminar and has filled them out as completely as possible. These forms are presented on the following pages. Read the information Russell has provided so that you can get acquainted with him PERSONAL FINANCIAL INFORMATION Climate Selamat IN NA Minh hth Date NA acquainted with him INFORMATION Cafermati N NA Birch M1991 in the NA Sar.Net CH are 55555555 sine. The NA Idee Art Wage Drive, A LA Laugas, NV XXXXXXXXXX Wedding Date CHILD Social Security Nam No. Gabe XXXX Birth Date 1/1/2014 XXX-XX- Degree BS EDUCATION School Russell Univ. Nevada, LV Business Marketing OCCUPATION Employer Position cars Russell Lucky Bets Casino Mgmt. Manager 2012-present Y LOCATION OF DOCUMENTS WBT Campo Mark sa duwe ce apply the tale ampilaya. a pics pot Nicole Miles hede Tule tocat Wells Fargonale depunt bus Curtification State Wallande deposits RETIREMENT INFORMATION nel Typen place plae plane eatinam hy Senary Olier SA Centre Bicos ASSETS - October 1, 2021 all ASSETS- October 1, 2021 RATE OF INTEREST MATURITY LOCATION BALANCE CHOCKINGC SAVINGS Mela 14.10 MONEY Am 012 MARKET ACCOUNT CDS Trade 517,000 E- Tek S NA NA 131 $1,200 CASH ON HAND SECURITY INVESTMENTS Shese A hehe 150 American 200 APLI 100 METTIVO NE 20 AUTOMOBILE(S) Model Cost Year Maks Current Valus 2018 Subaru $12,000 Cross Trek $20,000 REAL & PERSONAL PROPERTY Market Value (FMV) Replacement Value Fumiture and Stereo and TVs 15,000 $ 32,000 Clothing and Jewelry 3,750 $ 12,000 Computers, printer, etc 1.750 $5,250 Exercise Equipment 9.500 $ 14,100 Miscellaneous houschold items 5,000 $ 7.000 LIABILITIES pe AN SAC M M 2.9 M ACT Credit Cards -As of October 1, 2021 Se 2014 335 SI Credit Cards -As of October 1, 2021 La Fresnem 22 II SI 305515 MC se slala Tilf 35 Capital 21 535.5 512312 2020 INCOME Gross Income 1.200 - 650 76 Russell's Salary S142,000 Cash gifts recurring) Interest Dividends Capital gains distributions 349 Sale of Securities Fidelity Magellan Fund (FMAGX) 9,129 (non-recurring) 2020 EXPENSES Chowca M Trap CU TV and Kri "Today Ruslan Miche Sex See A. Mulae A Re France Taxholding 11 Social Security Testeding Casam 2012 Mis Malan Mini Pune ALAR W telecom Tuitim Barbeeld SO 11 et de Catal Indicates a discretionary expense. All others are non-discretionary Ka * Indicates a discretionary expense. All others are non-discretionary ** Calculate the blank fields from information in case. INSURANCE INFORMATION AUTO INSURANCE Den Subaren asy Nash IMA * 135 033 ACW 20 CW Tel Tv P. RENTER'S INSURANCE ured Ulter Alle Com w LIFE INSURANCE Tipe Late.com Mind YA 100.000 Cabe DISABILITY INSURANCE Policybel Eloyer Couper ay dactionele dhe My Bell Watang Pandey A days httlich Syan AS Podbye MEDICAL INSURANCE Pred AG Company Tir Care CHOD and Prime Sube sedar yaad e time be Bean Dr Route 40 Patacades Why Servis SCH $100 day Philip Kamehe Pedalupe 550 ESTATE PLANNING INFORMATION Russell would like to leave all of his assets to Gabe and leave him debt free in case of death. Russell would like his half- brother, Joe Norris, to be Gabe's legal guardian. Other than an up-to-date will, Russell has no formal estate plan FINANCIAL GOALS Short Range (1 Year) Pay of MasterCard and Capital One Card Reduce discretionary spending Purchase house Intermediate Range (1-5 Years) Establish an emergency fund Begin a college savings plan for Gabe Long Term (over 5 years) Start saving more aggressively for retirement Travel What is your single most important financial objective at this time? To reduce discretional spending FINANCIAL PRIORITIES Russell a LIVING paying monthly bills 1 b. PLEASURE: spending money C. RETIREMENT: invest in future 3 d. DISABILITY:protect against 4 c. DEATH: care for family E REDUCE TAXES spend to save g. INVESTING: accumulating assets 7 h. CHILDREN starting a family * Prioritized with 1 being most important and being least important OTHER INFORMATION 1. Are you able to save regularly? My contribution to my employer's 401(k) plan is the only regular savings 2. Do you invest regularly? I have dabbled in some investing but it's not regular. Usually, I try to invest bonuses or other windfalls received 3. Do you feel you are financially organized! Not really 4. Do you budget your money? No. I often overspend S. If you were to die, could your spouse handle the finances! N/A, but I believe Josie could handle the finances if we do get married 6. How do you feel about saving for retirement? It is very important 7. If you had an extra $5,000 what would you do with it? Take a vacation with Gabe. 8. How do you feel about taking investment risks? Awessive risk taker FINANCIAL GOALS Short Range (1 Year) Pay of MasterCard and Capital One Card Reduce discretionary spending Purchase house 3 Intermediate Range (1-5 Years) Establish an emergency fund Begin a college savings plan for Gabe Long Term (over 5 years) Start saving more aggressively for retirement Travel What is your single most important financial objective at this time? To reduce discretional spending FINANCIAL PRIORITIES Russell a. LIVING: paying monthly bills b. PLEASURE: spending money c. RETIREMENT: invest in future d. DISABILITY: protect against c. DEATHcare for family 1. REDUCE TAXES, spend to save 3. INVESTING: accumulating assets 7 1. CHILDREN: starting a family * Prioritized with being most important and being least important OTHER INFORMATION 1. Are you able to save regularly? My contribution to my employer's 401(k) plan is the only regular savings. 2. Do you invest regularly? I have dabbled in some investing but it's not regular. Usually, I try to invest bonuses or other windfalls received 3. Do you feel you are financially organized? Not really 4. Do you budget your money? No, I often overspend. 5. If you were to die, could your spouse handle the finances? NA, but I believe Josie could handle the finances if we do get married. 6. How do you feel about saving for retirement? It is very important 7. If you had an extra $5,000 what would you do with it? Take a vacation with Gabe 8. How do you feel about taking investment risks? Aggressive risk taker 9. How is your health? Very good