How The Personal Fence Works

© Copyright The Financial Fence Pty Ltd 2005

HOW THE PERSONAL FENCE WORKS


A CASE STUDYGEORGE & MARTHA MIAF


EQUITY

DEBT

EQUITY

$267,500

DEBT

$111,500

INVESTMENTCAPITAL

$63,000

PERSONALINCOME

$51,000

PERSONALCAPITAL

$316,000

NET INCOME+/- to Debt

INVESTMENTINCOME

$180

EXPENSES

-$37,000

INTEREST

-$7,800

NETINCOME

INVESTMENTCAPITAL

PERSONALCAPITAL

CHANGE INPERSONAL CAPITAL

$5,500

CHANGE ININVESTMENT CAPITAL

$5,000

NET CASH FLOW+/- to Debt

BALANCE SHEET“AS AT”


NET INCOME STATEMENT“FOR THE PERIOD”

CASH FLOW STATEMENT“FOR THE PERIOD”

THE FINANCIAL FENCE ®

George and Martha Miaf ExampleCalculate the Opening Equity

PERSONAL CAPITAL $316,000 plus INVESTMENT CAPITAL $63,000 EQUALSDEBT $111,500 plus EQUITY $267,500

REVAL/DEVALPERSONAL CAP

-$2,000

REVAL/DEVALINVESTMENT CAP

$5,000


-$2,000


$5,000


EQUITY

DEBT

EQUITY

$267,500

DEBT

$111,500

INVESTMENTCAPITAL

$63,000

PERSONALINCOME

$51,000

PERSONALCAPITAL

$316,000


-$9,380

INVESTMENTINCOME

$180

EXPENSES

-$37,000

INTEREST

-$7,800

NETINCOME

$9,380INVESTMENT

CAPITAL

PERSONALCAPITAL


$5,500


$5,000


$4,120






George and Martha Miaf ExampleCalculate the Income and Cash Flow


-$2,000


$5,000


-$2,000


$5,000


EQUITY

DEBT

EQUITY

$267,500

DEBT

$111,500

INVESTMENTCAPITAL

$63,000

PERSONALINCOME

$51,000

PERSONALCAPITAL

$316,000


-$9,380

INVESTMENTINCOME

$180

EXPENSES

-$37,000

INTEREST

-$7,800

NETINCOME

$9,380INVESTMENT

CAPITAL

PERSONALCAPITAL

$319,500


$5,500


$5,000


$4,120






George and Martha Miaf ExampleCalculate Personal Capital


-$2,000


$5,000


-$2,000


$5,000

+


EQUITY

DEBT

EQUITY

$267,500

DEBT

$111,500

INVESTMENTCAPITAL

$63,000

PERSONALINCOME

$51,000

PERSONALCAPITAL

$316,000


-$9,380

INVESTMENTINCOME

$180

EXPENSES

-$37,000

INTEREST

-$7,800

NETINCOME

$9,380INVESTMENT

CAPITAL

$73,000

PERSONALCAPITAL

$319,500


$5,500


$5,000


$4,120






George and Martha Miaf ExampleCalculate Investment Capital


-$2,000


$5,000


-$2,000


$5,000

+


EQUITY

DEBT

$115,620

EQUITY

$267,500

DEBT

$111,500

INVESTMENTCAPITAL

$63,000

PERSONALINCOME

$51,000

PERSONALCAPITAL

$316,000


-$9,380

INVESTMENTINCOME

$180

EXPENSES

-$37,000

INTEREST

-$7,800

NETINCOME

$9,380INVESTMENT

CAPITAL

$73,000

PERSONALCAPITAL

$319,500


$5,500


$5,000


$4,120






George and Martha Miaf ExampleCalculate the Debt


-$2,000


$5,000


-$2,000


$5,000


EQUITY

$276,880

DEBT

$115,620

EQUITY

$267,500

DEBT

$111,500

INVESTMENTCAPITAL

$63,000

PERSONALINCOME

$51,000

PERSONALCAPITAL

$316,000


-$9,380

INVESTMENTINCOME

$180

EXPENSES

-$37,000

INTEREST

-$7,800

NETINCOME

$9,380INVESTMENT

CAPITAL

$73,000

PERSONALCAPITAL

$319,500


$5,500


$5,000


$4,120






George and Martha Miaf ExampleCalculate the Closing Equity


-$2,000


$5,000


-$2,000


$5,000

CONTROL CHECKS1. TOTAL CAPITAL = DEBT + EQUITY2. OPENING EQUITY + NET INCOME = CLOSING EQUITY3. OPENING DEBT + NET CASH FLOW = CLOSING DEBT


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How The Personal Fence Works

Economy & Finance

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