PERSONAL FINANCE

INCOME STATEMENT
& CASH FLOW

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PRAYER

OBJECTIVES

To get to know with PERSONAL FINANCE

Income Statement and Cash Flow
To know the different sources of income.
To classify family expenses
To know the relationship between Income
Statement and Balance Sheet
To internalize the talk with unique individual
personal finance.

INCOME STATEMENT

A financial statement showing the profit and

loss sustained by the entity during a
particular period of time.

Income

XXX

Expenses
Profit (Loss)

XXX
XXX

STATEMENT OF CASH FLOW

The pattern of money received and spent

Cash, Beg

XXX

Inflow
Outflow
Cash, End

XXX
XXX

DIFFERENCE BET. I/C & C/F

The pattern of money received and spent

Income Statement

Cash Flow

All Inc.

All Cash Received

(revenue recvd,loan
proceeds)

All Exp (incl deprn,

amort)

Cash outflow (exp

paid, payment to
loans)

Profit/Loss

Available Cash End

Are we are spending How much is our

w/in our income?
available cash?

DEPN/AMORTN

Depreciation is the decrease in value of

tangible/intangible things

This makes house and other non PIG assets to

be dead investments.

KINDS OF INCOME

Employment Income Kind

Level of
Work/Income

Control

Employment
Income

Big Work (8hrs a

No control
day) Inc. equal to
level of Work
(matched w/ ur
profession)Big
Income (if u r

Passive Income

No Work. Income
depends on type
of investment

With Control

Inheritance
Income

No Work, Inc.
depending on the
vastness.

No Control

KINDS OF EXPENSES

Irregular
Foreseen

- celebrations
Unforeseen - emergencies

Regular
Non-discretionary

- Needs
Discretionary - Wants

WEALTHY ALLOCATION OF
INCOME

%age
10%
20%
70%

Description
Tithe
Investment
Living
Expenses

PERSONAL FINANCE I/S

PERSONAL FINANCE CASH FLOW

RELATIONSHIP OF PERSONAL
FINANCE I/S, B/S & C/S

POOR FLOWS

Income = Expenses
Liabilities expenses outflow

WEALTHY FLOWS

Income assets >income expenses profit

- inflows
Liabilities assets income payment of
liabilities expenses profit - inflows

WORKSHOP

Go over your Income Statement and Classify

your income and expenses.
Think on how can you increase your income
and decrease your expenses
Go over your Statement of Cash Flow and
classify both.
Decide your flow
Make a conclusion.

BABYLON

About 2200 BC it was known as the

site of a temple, and during the 21st
century BC it was subject to the
nearby city of Ur.
Microsoft Encarta 2009. 1993-2008 Microsoft
Corporation. All rights reserved.

STRUCTURE FROM THE UR

THE RICHEST MAN IN BABYLON

1.
2.

Start thy purse to fattening (pay yourself first)

Make thy gold to multiply (make your money work for
you)

3.
4.

Control thy Expenditures (live below your means)

Guard Thy Treasure from loss
(insurance protects your wealth)

5.
6.
7.
8.

Make thy dwelling place a profitable

investment (our home is our biggest exp)
Insure a future income (have a retirement plan)
Increase your ability to earn (side line, learn new skills)
Know where you are and where you are going
(track your wealth)