Identify and disclose specific assumptions used in analyzing each goal and need.
Discuss the resolution of any conflicts between the clients goals and needs, and the ability to satisfy them due to financial or other constraints.
Executive Summary: Names: Melissa Edmonds (23), educator Current Financial Condition/Background/Assumptions: Melissa graduated last year with a teaching degree. She plans on continuing to take courses ultimately to eam her master's degree. This will move her up the pay range and possibly get into administration. Her debt ratio is quite low which shows favorable position that assets are majorly funded through saving rather than debts. Her Financial Position shows sound profits after deducting her fixed Liabilities and Credit Card Payments. Ms. Melissa Edmonds Current Financial position Based On her Last Year Profit is as follows: Total Cash inflows. $35586 Total Cash Outflows. $26916 Surplus $ 8670 Financially Goals: Moving form renting into her own home or condo Continue to pay off her debts Start a basic investment plan Have a plan for emergencies, and unexpected events Objectives: To analyze her financial position, Calculate Financial Ratios: Calculate Leverage Ratio. As she has loan element in her balance sheet, this will help us to relatively measure the percentage of a company's assets that are provided via debt. Calculate operating cash flow ratio, as Melissa is a salaried employed. This will help in determining cash flows available to pay current liabilities and amount available to invest. Establish a clear understanding for all investment goals and objectives including: the various asset classes, investment management styles, asset allocations, acceptable risk and total long-term investment retum. Provide guidance and limitations to all investment in total; to produce enough levels of overall diversification, risk, and liquidity within the portfolio, so that all assets are managed in accordance with the long-term objectives. Establish a basis for evaluating investment results. Financial Advisor Duties and Responsibilities: Provide monthly reports that include securities, cash flow income, and the monthly change in value. . Fiduciary, non-biased third-party charged with helping clients meet long-term financial goals. Monitor all investment options and portfolio custodian. (Custodian is responsible for safekeeping of client's assets) Select assets in accordance with asset allocation providing enough diversification of risk and retums. Value all portfolio holdings on a regular basis. SWOT Analysis Strength: Good Coaching Training Experience; Already Having a Salaried Job; Bills are shared so spending's should be less; Balance shows good investment and enough cash in hand for future contingencies. Good Investment in Bucket Eaming Good Returns On portfolio. Weakness: One Student Loan is already ongoing. Leverage element in balance sheet can increase if loan for future studies will be taken and no Major Cash inflow will not be available for some time and hence will have to use savings. Still Doesn't own a House so in near future for that has to be made. Retirements plan must be undertaken to secure later future opportunities Can pursue for master's degree and get into administration further Higher pays and higher incentives Investments can provide good returns in future. Threats: If loan Amount increase, then fixed expense element will increase reducing Cash Availability Pursuing Masters will lead to no Cash Inflows for certain Time. Buying House will lead to selling major investment and thereby increasing leverage level in Balance sheet. Solutions: 1) Debt Ratio. Total Debts/Total Assets Lower the better / Present situation Total Debts: - $23,500 Total Assets: - $ 290,858 So, debt Ratio 23500/290858= The Debt Ratio is quite low which sows' favorable position that assets are majorly funded through saving rather than debts. 2) Profitability Ratio: - As Melissa is a salaried employed it is better to calculate Operating Cash Flow Ratio. it helps in Determining cash Flows available to pay Current Liabilities. Higher The better Operating Cash Flow Ratio: - Cashflow From Operation Current Liabilities Cash Flow from Operation: - $ 35,586 Current Liability: - $ 2000 So, it's is 17.79 which is favorable again 3) Cash Flow to Long Term Debt Ratio - The ratio measures how much cash is available to pay long term debts. This ratio is good indicator of potential Bankruptcy. It is: - Cash flow from Operation Total Debts . Cash flow from Operation: - 35586 Total Debts: $ 23500 . Ratio: - 1.51 This Ratio is also Favorable From above analysis we can conclude that Melissa Edmond Position is quite Stable. As she has less amount of debt in her balance and more assets and Cash in Hand is also Sufficient to overcome any Contingency. Implementation When it comes to saving and investing the most effective strategy is usually the simplest. When it comes to implementing the investment plan. I follow these steps: Invest according to your time horizon - more conservative for short term goals (cash and bonds) and more aggressive for long term goals (stocks) invest in consistent increments over time . Remain invested over the long run Minimize fees It pays to take some time to get organized and implement your plan. Doing so will provide some peace of mind that you're on track to meet your goals and allow you to get back to what you enjoy doing. Opportunities Opportunities and threats are extemals-things that are going on outside your companies, in the larger market. You can take advantage of opportunities and project against threats, but you can't change them Example include competitors, prices of raw materials, and customer shopping trends. . Can pursue for master's degree and get into administration further Higher Pays and Higher Incentives investment can provide good Returns in Future. Executive Summary: Names: Melissa Edmonds (23), educator Current Financial Condition/Background/Assumptions: Melissa graduated last year with a teaching degree. She plans on continuing to take courses ultimately to eam her master's degree. This will move her up the pay range and possibly get into administration. Her debt ratio is quite low which shows favorable position that assets are majorly funded through saving rather than debts. Her Financial Position shows sound profits after deducting her fixed Liabilities and Credit Card Payments. Ms. Melissa Edmonds Current Financial position Based On her Last Year Profit is as follows: Total Cash inflows. $35586 Total Cash Outflows. $26916 Surplus $ 8670 Financially Goals: Moving form renting into her own home or condo Continue to pay off her debts Start a basic investment plan Have a plan for emergencies, and unexpected events Objectives: To analyze her financial position, Calculate Financial Ratios: Calculate Leverage Ratio. As she has loan element in her balance sheet, this will help us to relatively measure the percentage of a company's assets that are provided via debt. Calculate operating cash flow ratio, as Melissa is a salaried employed. This will help in determining cash flows available to pay current liabilities and amount available to invest. Establish a clear understanding for all investment goals and objectives including: the various asset classes, investment management styles, asset allocations, acceptable risk and total long-term investment retum. Provide guidance and limitations to all investment in total; to produce enough levels of overall diversification, risk, and liquidity within the portfolio, so that all assets are managed in accordance with the long-term objectives. Establish a basis for evaluating investment results. Financial Advisor Duties and Responsibilities: Provide monthly reports that include securities, cash flow income, and the monthly change in value. . Fiduciary, non-biased third-party charged with helping clients meet long-term financial goals. Monitor all investment options and portfolio custodian. (Custodian is responsible for safekeeping of client's assets) Select assets in accordance with asset allocation providing enough diversification of risk and retums. Value all portfolio holdings on a regular basis. SWOT Analysis Strength: Good Coaching Training Experience; Already Having a Salaried Job; Bills are shared so spending's should be less; Balance shows good investment and enough cash in hand for future contingencies. Good Investment in Bucket Eaming Good Returns On portfolio. Weakness: One Student Loan is already ongoing. Leverage element in balance sheet can increase if loan for future studies will be taken and no Major Cash inflow will not be available for some time and hence will have to use savings. Still Doesn't own a House so in near future for that has to be made. Retirements plan must be undertaken to secure later future opportunities Can pursue for master's degree and get into administration further Higher pays and higher incentives Investments can provide good returns in future. Threats: If loan Amount increase, then fixed expense element will increase reducing Cash Availability Pursuing Masters will lead to no Cash Inflows for certain Time. Buying House will lead to selling major investment and thereby increasing leverage level in Balance sheet. Solutions: 1) Debt Ratio. Total Debts/Total Assets Lower the better / Present situation Total Debts: - $23,500 Total Assets: - $ 290,858 So, debt Ratio 23500/290858= The Debt Ratio is quite low which sows' favorable position that assets are majorly funded through saving rather than debts. 2) Profitability Ratio: - As Melissa is a salaried employed it is better to calculate Operating Cash Flow Ratio. it helps in Determining cash Flows available to pay Current Liabilities. Higher The better Operating Cash Flow Ratio: - Cashflow From Operation Current Liabilities Cash Flow from Operation: - $ 35,586 Current Liability: - $ 2000 So, it's is 17.79 which is favorable again 3) Cash Flow to Long Term Debt Ratio - The ratio measures how much cash is available to pay long term debts. This ratio is good indicator of potential Bankruptcy. It is: - Cash flow from Operation Total Debts . Cash flow from Operation: - 35586 Total Debts: $ 23500 . Ratio: - 1.51 This Ratio is also Favorable From above analysis we can conclude that Melissa Edmond Position is quite Stable. As she has less amount of debt in her balance and more assets and Cash in Hand is also Sufficient to overcome any Contingency. Implementation When it comes to saving and investing the most effective strategy is usually the simplest. When it comes to implementing the investment plan. I follow these steps: Invest according to your time horizon - more conservative for short term goals (cash and bonds) and more aggressive for long term goals (stocks) invest in consistent increments over time . Remain invested over the long run Minimize fees It pays to take some time to get organized and implement your plan. Doing so will provide some peace of mind that you're on track to meet your goals and allow you to get back to what you enjoy doing. Opportunities Opportunities and threats are extemals-things that are going on outside your companies, in the larger market. You can take advantage of opportunities and project against threats, but you can't change them Example include competitors, prices of raw materials, and customer shopping trends. . Can pursue for master's degree and get into administration further Higher Pays and Higher Incentives investment can provide good Returns in Future
