Whether you are thinking of starting your own business or you want to loan money from the bank or a lender, it is important that you know your current financial standing. You will know how you are doing financially by filling out a personal financial statement template. Filling out correct data into the template will result in accurate financial information.
There are two basic types of personal financial statement template that you can make or you can download from the internet—balance sheet and income statement. You are probably familiar with these documents but whether you are familiar or not, you still have to know what these documents are all about.
Balance Sheet. This financial document includes information such as your assets and liabilities. Your assets are anything that you own such as real estate properties, cars, and your bank savings. The liabilities are your loans and debts such as credit card debts, payments for the car, mortgages, and so on. You have to deduct your liabilities from your assets and the amount that you will get is your net worth. This will give you an idea about where you are currently standing.
Income Statement. This document includes your sources of income such as salary or business and your expenses like food, transportation, utility bills, etc. Deducting your expenses from your income gives you your net income. The net income gives you an idea about your financial situation at a particular period of time. It is important to include even the small details to make sure that you can get accurate results.
Income Statement shows net profit or net loss arising out of activities of a particular accounting period of any business organization.
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