Michelle Foxe's financial situation has both strengths and weaknesses. Her liquid asset ratio and debt ratios indicate her debts are manageable. However, she has a deficit between her income and expenses each month. She also has no retirement savings. The document provides recommendations for Foxe to improve her cash flow and begin retirement planning, including paying down debts, reducing expenses, and starting contributions to savings accounts and 401k plans. References are provided at the end.

1. TOPIC:STUDY CASE PERSONAL
FINANCE
PREPARED BY:
NOR AIDA ZURA BT PON
NOR HAFIZAH BT MAT KADIM
NURUL SAFIRAH AHMAD RIDZWAN
SITI KASTURI BT ISMAIL

2. CASH FLOW OF FOXE
 dissaving income statement.
This is because she makes more expenses than gain
income.
makes expenses more to the debt like pay credit card, car
loan payment.
must increase her liquid asset because these assets can be
converted into cash immediately with a minimum amount of
inconvenience and these assets have stable market value.
 Foxe also must increase her investment assets because it
is can afford her for getting extra or side income.
Foxe also must consider to invest to help her cash flow
overall

3. Strengthens of the Michelle Foxe family’s financial
situation
Liquid Asset to take- home pay ratio is 4.6 month and this show that her
be on the safe side.
Foxe’s Current ratio is 3.85.
Debt ratio is 38.09% and this show that Foxe’s family debt ratio is quite
alright because it is not that high meaning to say this family has the ability
to pay its debts.
 The Debt Service Coverage ratio is 9.83 and shows that Foxe earned
RM9.83 in take- home pay for each RM1.00 of required debt repayment
and interest.
The higher the ratio the better because it means Foxe family has the
ability to make payment.

4. Weaknesses of the Michelle Foxe family’s
financial situation
Deficit in income(the total of expenses is more than total of
income)
 Foxe’s income is RM29500 only and her total expenses are
RM34200
Does not have any planning or saving for retirement. This
shows that Michelle does not consent about her retirement
in future

5. EMOTIONAL ISSUES
Foxe’s has a good financial planning.
She wants to settle up all her debt as soon as possible.
She also wants to build her saving and start to make
investment.
Foxe’s also alert with her safety and she has group term
insurance paying 2 ½ times her salary and employer-paid
health insurance with a $1 million lifetime limit.
Foxe has a weakness during planning her financial for her
family. Foxe has absolutely no planning or saving for
retirement

6. 401(K)PLAN
A 401(k) allows an employee to save a percentage of their pre-tax pay
check dollars into an investment account.
The benefit is derived from your savings growing over the years with
pre-tax money and you not paying taxes until you start to withdraw at
retirement.
401(k) contribution money is put into an account and can be invested in
a number of ways depending on the plan your employer has set up.
Your employer also has the option, but not the obligation, to match a
certain percent of the money that you contribute.
Your money sits, it compounds, and it grows on its own.
The earlier you start saving, the more of the compounding effect you
will have and the better off you will be.

7. INDIVIDUAL RETIREMENT ACCOUNTS(IRAs)
basically a savings account with big tax breaks, making it an ideal way to sock away
cash for your retirement.
After the investor reaches age 59.5, withdrawals of any money from the account
(including investment gains) are tax-free

8. MISINFORMATIONS
Foxe state that she does not have saving and planning for her retirement.
in 3 to 10 years Foxe state that she wants to buy a new car and a condo or
apartment.
In my opinion that’s no need, because she already has a car.
it will increase her debt with financial institutions towards the acquisition costs
like monthly installments, fixed or conventional rate , down payment, stamp duty
and legal fees.
 she does not have IRAs (Individual Retirement Accounts). Investing in IRAs
gives her the chance to put aside money today and have it grow into a nest egg
you can tap in retirement.

9. Calculations of the savings required
to reach financial goals.
she needs to manage her financial well to avoid this from
happen. Since she stay with her parents, she should reduce
her expenses like reduce used her credit card.
for her storage locker rental fee, she must reduce it. All the
things from her previous married household she should put it
her parents house.
Savings

10. FINANCIAL PRODUCT
Investment in saving account. This is the most common investments that
and individual will have is to save in a saving account. By having a saving
account, Foxe can earn interest or can participate in profit sharing with the
bank. It is necessary for better retirement because it can be used to acquire
fixed assets.
Investment in unit trust. It helps in Foxe investment planning by giving her a
choice of placing your money in a diversified investment options. It also provides
Foxe with an opportunity to attain medium to long term capital growth by
investing primarily in equities.
 Foxe can own Employee Provident Funds (EPF). This is because EPF is fewer
funds for retirement, have roof to live under, to own better houses and yet be
able to lessen their monthly financial obligations, experience better cash flow as
less money is spent out of hand for the loan and Foxe can use this facility to grow
their wealth.

11. REFERENCES
(2008, 6 12). Retrieved 12 3, 2012, from https : //
www.usaa.com/inet/pages/financial_planning main
(2010, 5 23). Retrieved 12 3, 2012, from
rci,rutgers.edu/boneill/assignment/case-study.html
Financial Planning. (2010, 4 30). Retrieved 12
3, 2012, from financialplan.about.com
Masitah Hashim, F. A. (2007). Personal Finance. Shah
Alam: InEd UiTM.