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Individual Assignment Family Financial Planner

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Published by 2022792153, 2022-05-26 18:50:43

Individual Assignment Family Financial Planner

Individual Assignment Family Financial Planner

FACULTY OF BUSINESS MANAGEMENT
BA242: BACHELOR OF BUSINESS ADMINISTRATION (HONS) FINANCE

UNIVERSITI TEKNOLOGI MARA KOTA KINABALU
FIN5332G3

PERSONAL FINANCIAL PLANNING
INDIVIDUAL ASSIGNMENT

PREPARED BY:
AZWAR BIN AHMAD (2022792153)

PREPARED FOR:
MS. NUR HIDAYATI SAIRIN

DATE OF SUBMISSION: 27.05.2022

Family Background

In this project, I have chosen my friend’s family as my interviewee. Their family has a total of 6
members which are Mr. Shamsudin bin Hajibudin as the husband, Mrs Bunga Dahlia binta Madnor as
the wife, Mohd Uday as the first child, Mohd Apip as the second, Nur Sakina as the third, and Mohd
Paulus as the fourth and last child.
Mr. Shamsudin works as Chief Marketing Officer at the Apple Inc. for 10 years. He’s married with Mrs
Dahlia, a dentist who have worked for 4 years now. They have 4 children, the eldest who has married,
Mohd Uday, has just finished his bachelor’s degree in accounting and now he is proceeding to further
his studies for master’s degree in Universiti Teknologi Mara. The second child, Apip, is currently
studying in Universiti Malaysia Sabah for his diploma in science and technology. Next is the third child,
Sabrina, is now sitting for SPM this year and will continue her study for diploma in Universiti Teknologi
Mara by early next year. Lastly, Mohd Paulus the fourth child is currently in his primary school. Mr
Shamsudin earn RM 77,000 per year. Meanwhile Mrs Dahlia earn RM5,000 per month. Both of them
agreed that Mr. Shamsudin will claim the relief for all Apip and Paulus. And Mrs. Dahlia will claim child
relief for Sakina.
They have three houses located in Kota Kinabalu, Penampang and Putatan. They are currently staying
in Putatan and rent the other houses for their side income. Other than that, they have two cars which
are Honda Civic, which Mr. Shamsudin use to go work and Proton X70 which Mrs Dahlia use to go to
work.
Furthermore, I will be discussing Mr. Shamsudin and family’s financial situation based on their annual
income and expenses. For the conclusion, I will evaluate to see whether this family’s financial planning
is in good or bad condition for the year 2021. Last but least, I will state recommendations to the family
to improve their family’s financial situation in the upcoming year.

Mr. Shamsudin family’s assets, liabilities, income and expenses will be shown in the next page.

Age Asset Husband Wife
52 51
Occupation
CEO of Apple Dentist
Cash in hands
Current account balance 500 800
5,500 3,010
Saving account balance 700,000 209,000
Honda Civic (market value) 112,000
94,800
Proton X70 (market value) 5,600 4,870
iPad tablet-Sakina (current value) 6,100
iPhone 11-Apip (current value) 5,560 4,000

iPhone 13-Uday (current value) 40,000 500,000
Asus laptop (current value)
Jewellery 800,000 2,000
Household furniture 5,000
House in Penampang (market value) 4,500 550,000
1,780 95,000
House in Kota Kinabalu (market value) Liability 900,000
112,000 60,000
Credit card 1 3,000
Credit card 2 120 4,600

Housing loan 77,000 400
Auto loan (Honda Civic) 6,000 400
Maxis Bills overdue 8,900
4750
Income 1,000 500
8,470 550
Salary
Bonus 200 2,500
Rental income 550 2,000

Expenses 3,000 120
200 260
Utilities monthly cost 100 3,000
Internet cost every month
Fuel and car maintenance monthly 5,600 55
EPF 20,000 500
Clothing expenses monthly 280
900 350
Zakat per year 200
Medical expenses for spouse and children per year 900 900
Life insurance annually 300
Credit 1 monthly 1,200
Credit 2 monthly
5,500
Medical expenses for parents every six months
Yearly vacation expenses
Groceries monthly cost

Netflix monthly cost
House loan monthly
Auto loan monthly
Phone monthly

Monthly tuition (Paulus)
Annual tax

Balance Sheet

Balance sheet for Mr. Shamsudin’s family as for 31 December 2021.

Mr. Shamsudin's family

Proforma Balance Sheet

As of 31st of December of 2021

Current Assets RM RM

Cash in hand 1,300

Current account

balance 8,510

Saving account

balance 909,000

Total Assets 918,810

Non-Current Assets

Honda Civic 112,000

Proton X70 94,800

iPad 4,870

iPhone13 6,100

iPhone11 5,600

Asus laptop 5,560

Household furniture 40,000

Jewellery 4,000

House in KK 800,000

House in Penampang 500,000

Total Non-Current Assets 1,572,930

Investment Assets 13,220
EPF
Total Investment Assets 13,220

Total Assets 2,504,960

Current Liability 6,500
Credit card 1 6,780
Credit card 2
Maxis bills overdue 120
Total Current Liability
13,400

Non-Current Liability

Housing loan 1,450,000

Auto loan 207,000

Total Non-Current Liability 1,657,000

Total Liabilities 1,670,400

Net Worth 834,560

Cash Flow

Cash flow statement for Mr. Shamsudin’s family for the year Ended 31 December 2021.

Items RM RM
Shamsudin's salary 77,000 159,500
Dahlia's salary 60,000
Shamsudin's bonus 6,000
Dahlia's bonus 3,000
Rental income 13,500
Total Salary
4,800
Expenses 4,800
Utilities 12,000
Internet 8,400
Fuel and car maintenance
Clothing expenses monthly 550
Zakat 5,000
Life insurance
Medical insurance for spouse and 2,500
children 3,840
Credit 1 4,320
Credit 2 17,200
Medical expenses for parents 20,000
Vacation expenses 10,800
Groceries
Netflix 660
House loan 16,800
Auto 6,960
Phone 18,600
Tuition (Paulus) 2,400
Total Expenses
140,180
(Saving)/Dissaving
19,320

Financial Ratio
Based on the balance sheet and income statement, financial ratio will be used to evaluate the overall
financial condition of Mr. Shamsudin’s family.

1. Current Ratio = CA/CL = 918,810 / 13,400 = 68.57
*The current ratio shows high liquidity position because more than 1. This indicate that Mr.
Shamsudin’s family has a high liquidity position and are able to pay short terms obligations.

2. Take home pay Ratio = 918,810 / 140,700 = 6.53 x 365 = 2,383.45/30 = 79.4 month
*The high ratio implies a very good liquidity position for Mr. Shamsudin’s family. It means that
they can survive for more than 1 year using current assets.

3. Debt Ratio = 1,670,400 / 2,504,960 = 66.68%
*Mr. Shamsudin’s family may face difficulty due to higher percentage of debt than 50%. This
indicates their family is having high debt and in a risky position.

4. Debt Service Coverage Ratio = 140,700 / 28,750 = RM4.89
*The ratio shows more than 1 which means Mr. Shamsudin’s family earned RM4.89 in take
home pay for each RM1.00 of required debt repayment and interest. The higher the ratio the
better because it means that Mr. Shamsudin’s family has the ability the make payment.

Income Tax

Tax calculation for Mr. Shamsudin.

Tax Relief RM RM
Mr. Shamsudin 77,000
Salaries 6,000 91,900
Bonus 8,900 91,900
Rental income
Aggregate Income 0
less: Donation
Total Aggregate Income 9,000
5,000
Relief
Individual 2,500
Medical expenses for parents
iPad, iPhone11, iPhone13, Asus 8,000
laptop 2,000
Children: 6,000
Apip
Paulus 32,500
Life insurance and EPF
Total Tax Relief 59,400

Chargeable Income 1800
1,222
Gross Payable Tax
On the first 50,000 3,022
On the next 9,400 x 13%
Total Income Tax 550
550
Rebate
Zakat -5,500 2,472
Total Tax Rebate -3,028

Total Tax Charged
less: Annual Tax
Tax Paid/Tax Received

Mrs Dahlia’s Tax Relief calculation.

Mrs. Dahlia RM RM
Salaries 60,000
Bonus 67,600
Rental income 3,000 67,600
Aggregate Income 4,600
less: Donation
Total Aggregate Income 0

Relief 9,000
Individual 3,000
Medical expenses for parents 2,500
iPad 6,000
Life insurance and EPF
Medical expenses for spouse and 2,500
child 2,000
Sakina
25,000
Total Tax Relief
42,600
Chargeable Income
600
Gross Payable Tax 608
On the first 35,000
On the next 7,600 x 8% 1,208
Total Income Tax
550
Rebate 550
Zakat
Total Tax Rebate 658
-900
Total Tax Charged
less: Annually Tax -242
Tax Paid/Tax Received

Conclusion

In my opinion, the expenses of Mr. Shamsudin’s family is quite high but comparing to their income, I
think they will still be able to stay in a good financial position. Based on my analysis of Balance Sheet
for Mr. Shamsudin’s family is without a doubt, they are in a very good and stable position because
they own a large amount of net worth, and this categorized them as M40. Other than that, for the
cash flow statement, Mr. Shamsudin’s family will not face any difficulties in expenses because they
have a good amount source of income yearly and will have low chance of going poor. Next is the
financial ratio, although they possess a lot of money, the financial ratio calculation showed that they
have a very high debt which is bad for their family in long term. Finally for the tax relief, based on the
tax computation, Mr. Shamsudin total income tax is RM3,022. Since the child relief for 2 of his
unmarried children is claim by him, he is able to reduce the chargeable income. By doing so, only RM
9,400 is chargeable at 13%. Besides that, Mrs. Dahlia claimed 1 child relief which reduced her
chargeable income. By doing so, Mrs. Dahlia get to reduce her income that is taxed at 8%. Since Mr.
Shamsudin will have a tax refund due to deductions on his annual tax fee, it is more suitable for Mrs.
Dahlia to get one child relief instead of Mr. Shamsudin take all 3 of their children child’s relief because
it helps in reducing her chargeable income. Hence, it is very important to be knowledgeable in tax
reliefs and deductions for tax planning purposes.

In the current year of 2021, I believe that the Covid-19 pandemic must have affected Mr. Shamsudin’s
family in any way. However, based on all the financial calculation I have made, I can guarantee that
Mr. Shamsudin’s family will survive in this pandemic and surely will recover in a flash after the
pandemic gets terminated. With the stable source of income of Mr. Shamsudin and Mrs. Dahlia, they
will manage to increase their capability in improving their lifestyle. Other than that, with extra income
they could donate some to charities which later can be claimed for tax deductions if it is donated to
eligible funds or institutions.


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