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Completing a personal financial statement is an essential task for detailing your personal assets, liabilities, and net worth outside of your business. Assets include resources that you own outright, such as cash, investments, homes, and cars, while liabilities refer to debts or obligations like bank notes that you are required to pay back. Your net worth is calculated as the total value of your assets minus your liabilities. This information is crucial when seeking loans or investment, as lenders and investors typically require it to assess your financial standing. To complete your personal financial statement, you’ll need to list your assets and liabilities, and then use spreadsheet functions and formulas to calculate your total assets, liabilities, and net worth. Begin by opening the personal financial statement spreadsheet that accompanies this guide. Make a copy, rename it, and enter your personal details like name, title, and date. Then, proceed to list your assets, which are essentially items or resources that can be converted into cash or income. It’s acceptable to estimate these values initially; however, ensure they are updated and accurate before meeting with lenders.
Once your assets are listed, move on to identifying your liabilities, which encompass all debts or financial obligations you currently have. This includes items such as credit card debts, personal loans (notes payable), outstanding taxes, and mortgages on real estate properties. It’s important to include all liabilities, whether they are short-term or long-term. The spreadsheet will automatically calculate the total amount of your liabilities. It also performs the calculation for your net worth by subtracting the total liabilities from your total assets. If you intend to share this statement with lenders, make sure to print, sign, and date it to verify that the information provided is accurate and current. If needed, you can also fill out the second half of the spreadsheet for more detailed information. Finally, incorporate this critical data into your business plan by adding a link to your completed spreadsheet under the ‘Startup Expenses and Capital’ subheading in the ‘Financing Information’ section. Now, it’s your turn to act: Make a copy of the personal financial statement spreadsheet and rename it, list all your assets and liabilities, use the provided functions and formulas to perform the necessary calculations, and then link your spreadsheet to your business plan.