Project on Financial Management - Essay Example

The balance sheet of my family reveals that we have just enough assets to cover our liabilities. We keep liabilities to a minimum because we have three growing children and our money goes to support their daily expenses. Aside from paying for the mortgage, there are just the monthly utilities and the telephone and cable to pay for. But as can be reflected, the liabilities already consume about 77% of our resources.The asset to debt ratio of 1.29 shows that our financial liquidity, or our ability to cover our liabilities.

As shown, our assets are still more than our debt which enables us to pay for our obligations by keeping them to a minimum – only that which we can afford.The only investment asset we have is our life insurance which has a cash value of $3000. Since we are still paying for our house, it is still not considered as an asset since the title to the property is not yet in our name until it is fully paid. The $5000 in our checking account is composed of the $300 per month I struggle to save for emergency purposes plus other savings made in the process.