Harry and Sally Jones Due to their limited knowledge in personal finance they are in a desperate need of your help! They want to know how well they are doing financially and how could they improve their situation.

Based on information they provided to you:

1. Construct their Cash Flow Statement (Income Statement).

2. Construct their Balance Sheet.

3. Calculate their financial well-being through the use of ratios.

4. Provide recommendations.

	Harry's Salary (Net)	$ 30,000
	Sally's Salary (Net)	$ 30,000
	Home value	$ 300,000
	Mortgage payment	$ 15,000
	2017 Lexus fair market value	$ 40,000
	Checking Account balance	$ 1,000
	Groceries	$ 7,000
	Investment Account balance (that holds mutual funds)	$ 900
	2017 Lexus loan payment	$ 8,000
	Past Due Utility Bill	$ 250
	Utilities	$ 3,000
	Credit Card balance	$ 500
	Entertainment	$ 2,600
	2017 Lexus loan balance	$ 24,000
	Stamp Collection	$ 1,500
	Gas	$ 1,700
	Mortgage balance	$ 250,000
	Credit Card payments	$ 2,300
	Jewelry	$ 150
	Savings set aside each year towards a new car	$ 700
	Tax Refund	$ 900
	Money Market Account balance	$ 1,500
	401(k) Account balance	$ 500
	Cash	$ 100
	Auto Insurance payments	$ 960
	Auto Registration	$ 1,200
	Home and Auto Maintenance	$ 4,500

Cash Flow Statement
Harry and Sally Jones
January 1, 2016 - December 31, 2016
CASH INFLOWS
	Income	Annual Amount
	Total Cash Inflows
CASH OUTFLOWS
	Fixed Expenses	Annual Amount
	Total Fixed Expenses
	Variable Expenses
	Total Variable Expenses
	Total Living Expenses
	NET CASH SURPLUS (DEFICIT)

Balance Sheet
Harry and Sally Jones
December 31, 2016
ASSETS				LIABILITIES & NET WORTH
	Monetary Assets	Amount			Current Liabilities	Amount
	Total Monetary Assets				Total Current Liabilities
	Investment Assets				Long-Term Liabilities
	Total Investment Assets				Total Noncurrent Liabilities
	Retirement Assets
	Total Retirement Assets				Total Liabilities
	Housing
	Total Housing				Net Worth
	Automobiles and Personal Property
	Total Automobiles and Personal Property
	Total Assets				Total Liabilities and Net Worth

	Financial Well-Being Analysis
	Harry and Sally Jones
RATIOS
	Area	Calculation	Ratio	Recommended
	Living Expenses Covered Ratio	Monetary Assets / Monthly Living Expenses		3 to 6 months
	Debt Ratio	Total Liabilities / Total Assets		less than 1
	Debt Service to Income Ratio	Annual Debt Payments / Annual Income		less than 36%
	Saving Ratio	Annual Savings / Annual Living Expenses		10% or more
	Investment Assets to Total Assets Ratio	(Investment Assets + Retirement Assets) / Total Assets		10% or more

4a. Based on your Financial Well-Being Analysis, how well are Harry and Sally managing their finances? Explain.

4b. What recommendations do you have to help Harry and Sally improve their financial situation?