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PUBLISHED : Monday, 28 January, 2008, 12:00am
UPDATED : Monday, 28 January, 2008, 12:00am
 

Pick the correct answer

1 Companies also calculate their net worth. What is it called?

a) Net Worth Statement

b) Cash Flow Statement

c) Balance Sheet Statement

d) Profit and Loss Statement

2 Liabilities is another word for:

a) debt

b) loan

c) an obligation to pay in the future

3 A salary is an asset.

a) true b) false

4 Leverage means:

a) your assets are worth more than your liabilities

b) the income you get from an investment is higher than the interest you pay on the loan you took to buy this investment

c) you have potential to increase your assets in your portfolio

Here are a few activities you can research on this week's topic:

1 Calculate your net worth. Is it positive or negative? Is the short-term net worth balanced?

2 Do an internet search on a few companies from different sectors and have a look at their balance sheets. Compare their assets and liabilities. Compare their short-term and long-term assets. What do you observe?

3 Look at what you have bought last week: which purchases are expenses and which ones are assets?

Answers

1. c, 2. all three, 3. b (a salary is an income; only the amount you set aside will increase your assets), 4. b

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