2. Net Worth: the difference between your total assets, and
your total liabilities.
Assets: things that you own that are worth
something.
Liabilities: what you owe

3. Assets:
Liquid Assets: assets that can easily be converted to cash

4. Semi­liquid assets:
assets that can be converted to cash, but not
immediately.
usually some type of long term
investment.

5. Non­Liquid assets:
assets that can not readily be converted to
cash.
usually some type of property that must be
sold in some manner

6. Liabilities: what you owe
Short­term debt
should be paid off within a 12 month period
typically credit cards, and small loans

7. Long­term debt
debt used to finance long­term investments
like real estate, or major personal assets like
your residence.

8. Krista goes to her financial advisor to find out how
her net worth looks. She gives her advisor the
following information:
­ she lives in a $210,000 home with a mortgage of
$152,000.
­ she has $35,000 invested in RRSPs
­ she has $734 in her chequing account and owes
$12,500 on her credit card.
­ she has a vehicle worth $15,000 but still owes
$5,000.

12. ***

13. ***
Debt­Equity Ratio should not exceed 50% of Net
Worth.

14. Complete Assignment #5
And that's the end of the unit.