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Assignment 1 Fin533 PDF
Assignment 1 Fin533 PDF
ACKNOWLEDGEMENT ....................... 3
BIOGRAPHY OF THE FAMILY ............ 4
FINANCIAL INFORMATION ............... 6
MONTHLY EXPENSES......................... 8
BALANCE SHEET STATEMENT.......... 9
CASH FLOW STATEMENT ................. 11
RATIOS ................................................. 13
INCOME TAX YEAR ASSESSMENT
2020 ...................................................... 15
COMMENT AND ADVISE ...................16
APPENDIXES .......................................19
REFERENCES ..................................... 20
First and foremost, praises and thank you to the God, the Almighty, for His blessings for
me to complete the assignment given by the lecturer.
I would like to express my gratitude to my lecturer, Ms. Noranida binti Kamaludin because
of her patience guide me to complete the assignment. Her guidance really helps me to succeed and
complete this assignment within the time given. I also want to express my gratitude to my father,
En. Mohd Sabri for his contribution to help me complete the assignment. Without his contribution,
it will be difficult for me to complete the assignment within the time given.
Lastly, I also want to thanks to my family and friends for their support and encouragement
throughout I complete this assignment. Their supports and encouragement really help me when I
feel demotivated and I did complete the assignment successfully.
BIOGRAPHY OF THE FAMILY
For this individual assignment for FIN533, I have been assigned to make financial planning
for a family and I chose my own family to do the financial planning. En. Mohd Sabri bin Mohd
Yusof is currently a private sector’s employee which his company is located at Subang Jaya,
Selangor. He is 50 years old and married to Pn. Mazwin who is full-time housewife and endowed
with 4 children which is 3 daughters and a son. Basically, this family consist of 6 members. The
first child of his is Munirah, 20 years old who is still studying full-time in Bachelor of Business
Administration (Hons) Finance at UITM Puncak Alam branch who make PTPTN loan to further
her studies. The second and third child of his are Mukhlissah, 17 years old and Murzaliffah, 14
years old who is studying in secondary school at Sekolah Menengah Kebangsaan Perempuan Raja
Zarina and go to school by take the school bus which fees as much as 65 per person and the
payment until November. The youngest child of En. Mohd Sabri is Muhamad Muzamir Fitri, 12
En. Mohd Sabri earns RM 5,500 salary with RM 300 bonus per month. His wife, Pn. Mazwin
have babysitting 2 children and received wages as much as RM 850 per month. En. Mohd Sabri
also have fund’s savings in EPF. In the middle of May, En. Mohd Sabri have received half of his
fund’s savings in EPF as much as RM 70,000. En. Mohd Sabri and family had been living in an
inheritance house of his late father at Kampung Pendamar, Klang, Selangor. Mr. Mohd Sabri also
owns a Proton Wira and secondhand Proton Exora as his family car and a Honda Dash 125
motorcycle for his to go work. All the vehicles already have been fully paid. As for Proton Exora
and Honda Dash 125, it is purchased by cash because En. Mohd Sabri got some extra money from
his late father’s will. Other assets that En. Mohd Sabri owned are furniture, jewelleries and on
August, he purchased a HP Laptop that cost RM 2500. En. Mohd Sabri also make an investment
in Tabung Haji and EPF contribution.
Details RM
Monthly donation 50
Monthly Expenses
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Details RM RM RM RM RM RM RM RM RM RM RM RM
Utilities bill expenses 500 500 500 500 500 500 500 500 500 500 500 500
Groceries expenses 300 300 300 300 300 300 300 300 300 300 300 300
Parent's allowance 300 300 300 300 300 300 300 300 300 300 300 300
TM Unifi bill 89 89 89 89 89 89 89 89 89 89 89 89
Muzamir 's tuition fees expenses 100 100 100 100 100 100 100 100 100 100 100
Fuel and toll expenses 300 300 300 300 300 300 300 300 300 300 300 300
Dining expenses 200 200 200 200 200 200 200 200 200 200 200 200
Children's bus fees 130 130 130 130 130 130 130 130 130 130 130
Astro bill expenses 61.32 61.32 61.32 61.32 61.32 61.32 122.64 122.64 61.32 61.32
Children's school expenses 208 208 208 208 208 208
Car maintenance 500 500
Car insurance and road tax 1,400
Motor insurance and road tax 400
Family vacation 1,500
Annual zakat and EPF's zakat 3,400
Annual income tax 1,400
Clothing expenses 500
Donation expenses 50 50 50 50 50 50 50 50 50 50 50 50
EPF contribution 605 605 605 605 605 605 605 605 605 605 605 605
Purchased HP Laptop 2,500
Monthly leisure and miscellaneous expenses 300 300 300 300 300 300 300 300 300 300 300 300
Munirah's university expenses 500
Family medical expenses 300
Personal loan monthly installment 1,125 1,125 1,125 1,125 1,125 1,125 1,125 1,125 1,125 1,125 1,125 1,125
Borrowed from a friend due Dec 2020 300
BALANCE SHEET STATEMENT
Investment Assets
EPF balance as at 31 Dec 2020 80,000
Tabung Haji balance as at 31 Dec 2020 35,000 Total Liabilities 41,123
Net Worth 632,872
Total Assets 673,995 Total Liabilities and Net Worth 673,995
Regarding on the balance sheet as at 31 December 2020, En. Mohd Sabri and family have
total assets as much as RM 673,995 which is quite high. The liquid assets are on cash in hand and
En. Mohd Sabri and Pn. Mazwin’s savings account are RM 9900 in total. Next, the lifestyle assets
that En. Mohd Sabri owned are he have 2 cars which is Proton Wira and Proton Exora which he
had fully paid long years ago. He also has a motorcycle which is Honda Dash 125 which also fully
paid last year. Furthermore, En. Mohd Sabri also got the inheritance house from his late father
which cost RM 500,000 at market value. Moreover, En. Mohd Sabri also owned furnitures that
cost RM 10,000 and his wife and his daughters also owned jewelleries as much as 20 gram which
cost RM 4,796 at current value. This year, in August, En. Mohd Sabri had purchased a HP Laptop
that cost RM 2,500 at current value. For investment, En. Mohd Sabri used EPF contribution and
Tabung Haji as his place to invest his money. These assets are important because these assets could
be benefit to the family in the future and could be the emergency fund when something unwanted
happen.
The current liabilities are Astro bill outstanding which the amount is RM 123 and borrowed
from a friend due December 2020 as much as RM 500 and already paid within this year because
current liabilities duration to be paid is not more than one year. En. Mohd Sabri has only a current
liability which is personal loan and the balance is RM 40,500. En. Mohd Sabri make this loan in
the year of 2018 and the total loan with 7% interest rate is RM 67,500.
Personal Loan
Total loan RM 67,500
Interest rate 7%
Tenure 5 years
Total installment RM 13,500
Total monthly installment RM 1,125
Total loan balance RM 40,500
Total tenure balance 3 years
CASH FLOW STATEMENT
Diagram 1
RATIOS
Asset Liquidity
En. Mohd Sabri and family Tax Return for the year of assessment 2020
RM RM
Aggregate income:
Monthly salaries (5,500 x 12) 66000
Bonus per year (300 x 12) 3600
Total aggregate income 69600
(-) Monthly donation (50 x 12) -600
69000
(-) Reliefs
Individual 9000
Wife 4000
Children:
Munirah studied in Degree at UITM Puncak Alam 8000
Mukhlissah studied in secondary school 2000
Murzaliffah studied in secondary school 2000
Muzamir studies in primary school 2000
EPF contribution 7000
Parent 1500
Lifestyle (HP Laptop + Internet) 2500
Total Reliefs -38000
Chargeable income 31000
Income tax computation:
On the first 20,000 150
On the next (11,000 x 3%) 330
Total income tax 480
(-) Rebates:
Self (1<35,000) 400
Wife 400
Zakat 3400
Total Rebates -4200
Total tax charged -3720
(-) Monthly tax deduction (116.65 x 12) -1400
Tax paid in excess -1400
Referring to the statement above, En. Mohd Sabri have assets or savings where the amount
is high to cover the liabilities that the family borrow which is total of the assets is RM 673,995
while the total of the liabilities is RM 41,123. With the amount stated in the balance sheet and the
percentages of ratios, there is no problem for En. Mohd Sabri to pay his debt obligations such as
current liabilities and non-current liabilities and he also have the chances to make another loan
because the ability for his to pay the debt increased. En. Mohd Sabri also can make another
investment other than Tabung Haji and EPF contributions to gain more savings in the future. Next,
the net worth of this family is RM 632,872 which the assets are more than the liabilities and this
family have extra saving if some emergencies happen.
Based on the cash flow statement above, En. Mohd Sabri and family experiences some
savings because the total income is bigger than the total expenses in which the amount savings is
RM 81,758. Fortunately, En. Mohd Sabri also earned bonus per year as much as RM 3,600 and
half of his EPF’s fund savings which the amount is RM 70,000 as his family savings other than
his salary and Pn. Mazwin’s wages. However, it is quite a concern that this family’s expenses are
quite high despite they have sum of money that they could save. En. Mohd Sabri apparently spend
more in utilities bills which is RM 500 per month and could reduce the usage of electricity and
water. Moreover, En. Mohd Sabri also could reduce the expenses on leisure and miscellaneous
down to RM 200 monthly. Besides that, all children of En. Mohd Sabri are still studying, but
because of unfortunate event such as the pandemic of COVID-19 happen, En. Mohd Sabri could
save a little from the expenses spent on them. This can free up a bit of En. Mohd Sabri’s budget
and save more for the future.
Insurance planning is important part of financial planning and also parts of today’s life.
Nowadays, insurance become one of need as it gives many benefits such as protects from having
difficulties and short of money if something unwanted happen. It is found that En. Mohd Sabri did
not provide any insurance for himself and his family. The insurance that I suggest for En. Mohd
Sabri and his family take in the future are the basic one such as life insurance and medical
insurance. For life insurance, it provides financially for En. Mohd Sabri loved ones if one day En.
Mohd Sabri unable to work anymore. With having this insurance, it enables them to continue
enjoying a comfortable lifestyle with minimum worry. As for medical insurance, it helps En. Mohd
Sabri and family to pay the bills if they develop some certain illnesses or suffer from injury or
disability or admitted in the hospital. Furthermore, as for the children who is still studying and En.
Mohd Sabri who almost want to retire, this family also can take education and retirement
insurance. This type of insurance, it enables overseas education for his children or a comfortable
standard of living during his retirement days. Besides that, En. Mohd Sabri also can use SSPN for
his children under 29 years old for many benefits.
Investment Planning
Retirement planning is the process of determining retirement income goals and the actions
and decisions necessary to achieve those goals. Retirement planning includes identifying sources
of increase, estimating expenses, implementing a savings program and managing assets and risk.
(Kagan, Retirement Planning Definition, 2020). En. Mohd Sabri who is working in private sector
only depending on Employees Provident Fund (EPF) which contributed 11% of his monthly
salaries. En. Mohd Sabri should rethink about to retire early or not to adjust his financial planning
in the future. As for the suggestion, En. Mohd Sabri should contribute in Private Retirement
Scheme (PRS) for further investment in retirement years. En. Mohd Sabri can take moderate fund
option as he is between 45 – 50 years old range. With this retirement planning, it is enough for En.
Mohd Sabri and family in the future after the retirement of En. Mohd Sabri.
Estate Planning
Estate planning is the preparation of tasks that serve to manage an individual’s asset base
on the event of incapable or death. The planning includes the assets of the heirs and the settlement
of estate taxes. (Kagan, Estate Planning Definition, 2020). En. Mohd Sabri and family have
comprised everything his owned such as liquid assets, lifestyle assets, investments and liabilities
are all part of his estate. All of the estate is under his name and his wife, Pn. Mazwin. In the future,
En. Mohd Sabri and Pn. Mazwin need to ensure that the estate owned will be leave to the right
beneficiaries. Besides that, En. Mohd Sabri always need to update his will because the estate will
change from time to time. Wills is important because it will avoid difficulties and disagreement
between the beneficiaries which is his children.