Net Worth Statement
KNOWLEDGE EXPECTED OF: Both CFP® Professionals and QAFPTM Professionals
- Define a net worth statement.
- Explain the purpose of a net worth statement.
- Explain what a net worth statement may be used for.
- Define asset.
- Define liability.
- Define net worth.
- Calculate net worth.
- Explain how each of the factors may impact net worth over a period of time, such as:
- Asset values
- Liability values
- Cash flow surpluses/deficits
- Growth in asset values
- Reduction in asset values
- Growth in liability values
- Reduction in liability values
- Evaluate how each of the factors may impact net worth over a period of time.
- Interpret a change in net worth over a period of time.
Glossary of Verbs (mouse over to see definition)
To state exactly the meaning of
To be aware of / to recognize and correctly name / to locate an appropriate resource
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
To note the similarities and differences between two or more things
To determine an approximate value for
To find the value using mathematics
To change from one form or purpose to another
To reach a conclusion or make a judgement through careful study
To give the meaning of / to construe or understand / to translate orally