Admin – Page 18

8 Aug 0

The Financial Planning Process

Step 1: Collect and assess the financial data of the client.

Step 2: Determine the goals and objectives of the client.

Step 3: Analyse the client’s needs and identify any financial problems in strategy formulation.

Step 4: Structuring the Statement of Advice (SOA).

Step 5: Recommendations and implementations.

Step 6: Review and monitor.

Admin

Financial Planning

8 Aug 0

Balance Sheet

Assets

Cash ($):

Accounts Receivable ($):

Inventory ($):

Prepaid Expenses ($):

Current Assets:

Other Assets ($):

Fixed Assets at Cost ($):

Accumulated Depreciation ($):

Net Fixed Assets:

Total Assets:$

Liabilities & Shareholders’ Equity

Accounts Payable ($):

Accrued Expenses ($):

Current Portion of Debt ($):

Income Taxes Payable ($):

Current Liabilities:

Long Term Debt ($):

Capital Stock ($):

Retained Earnings ($):

Shareholders’ Equity:

Total Liabilities & Shareholders' Equity:$

Admin

Financial Statements

8 Aug 0

Treasury Bonds

Issued By: Government

Market: Money

Term: Medium to Long (>1 Year)

Type: Discount Security

Liquidity: High

Risk: Low

Admin

Financial Instruments

8 Aug 0

Financial Instruments (Assets)

Securities:

(1) Equity

Ordinary Shares (Common Stock)
Preference Shares

(2) Fixed Income (Debt)

Depository Receipts
- - American Depository Receipts (ADRs)
  - European Depository Receipts (EDRs)
  - Luxembourg Depository Receipts (LDRs)
  - Global Depository Receipts (GDRs)
  - Indian Depository Receipts (IDRs)
CREST Depository Interests (CDIs)
Bills
- - Bank Bills
  - Commercial Bills (Bill of Exchange)
  - Government Bills
  - Treasury Bills (T-Bills)
Bonds
- - Corporate Bonds
    - Debentures (Security attached)
    - Unsecured Notes (Security not attached)
    - Subordinated Debt (Bonds that are subordinated to the claims of other creditors)
  - Government Bonds
    - Treasury Bonds (T-Bonds)
  - Knock-out Bonds (Bonds that give the issuer or a third party a right to extinguish them under certain conditions)
  - Perpetual Bonds (Bonds which don’t have a maturity date)
  - Certificate of Deposit (CD)

Convertible Notes
Mortgage Loans
Overdrafts
Promissory Notes
- - Commercial Paper
  - P-Notes
Term Deposits
Term Loans
Treasury Notes (T-Notes)

(3) Derivatives

Forwards
Futures
Options
- - Company Options
  - Exchange Traded Options (ETOs)
Swaps
Warrants
- - Basket Warrants
  - Barrier / Knock Out Warrants
  - Capital Plus Warrants
  - Commodity Warrants
  - Currency Warrants
  - Endowment Warrants
  - Equity Warrants
  - Index Warrants
  - Instalment Warrants
  - MINIs
    - MINI Long
    - MINI Short

Admin

Financial Instruments

8 Aug 0

Financial Markets

Capital (Long Term)
Corporate Debt
Derivatives
Equity
Foreign Exchange
Government Debt
Money (Short Term)
Bills
Central Bank
Commercial Paper
Inter-Bank
Negotiable Certificates of Deposit
Retail
Wholesale

Admin

Financial Markets

7 Aug 0

Capital Adequacy

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Common Equity Tier 1 (CET-1)

Tier 1 (Core) Capital
- - Ordinary Shares
  - General Reserves
  - Current Year’s Earnings
  - Capital Profits Reserve
  - Tier 2 (Supplementary) Capital

Common Equity Tier 2 (CET-2)

Tier 2 (Upper) Capital
- - Perpetual Cumulative Preference Shares
  - Perpetual Cumulative Mandatory Convertible Notes

Tier 2 (Lower) Capital
- - Term Subordinated Debt
  - Limited Life Redeemable Shares

Calculations

Total Risk Weighted Assets (RWA) = Value of Assets x Risk Factor
Min. Common Equity Tier 1 (CET-1) = Total Risk Weighted Assets (RWA) x 4.5%
Min. Tier 1 Capital = Total Risk Weighted Assets (RWA) x 6%
Min. Tier 2 Capital = Total Risk Weighted Assets (RWA) x 2%
Min. Total Capital (Tier 1 + Tier 2) = Total Risk Weighted Assets (RWA) x 8%

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Admin

Financial Analysis, Risk & Compliance

Author Archive Admin

The Financial Planning Process

Balance Sheet

Assets

Liabilities & Shareholders’ Equity

Treasury Bonds

Financial Instruments (Assets)

(1) Equity

(2) Fixed Income (Debt)

(3) Derivatives

Financial Markets

Capital Adequacy

Common Equity Tier 1 (CET-1)

Common Equity Tier 2 (CET-2)

Calculations