Introduction:
In this individual assignment, you will be provided with a comprehensive case study. Your task is to evaluate the provided information and develop a written financial plan within a maximum of 8 pages. The financial plan should cover various aspects, including assumptions, key considerations, recommendations, financial analysis, and strategies for the case study individual or family.
Table of Contents:
Your written financial plan should be structured with the following sections:
Assumptions and Key Considerations:
Clearly outline the assumptions made during the financial planning process, such as inflation rates, investment returns, and other relevant factors.
Identify key considerations from the case study that may impact the financial plan’s development.
Recommendations:
Summarize the core recommendations for the case study individual or family. Provide a high-level overview of the proposed financial strategies.
Financial Analysis:
Conduct a thorough financial analysis based on the case study data. Include analyses of net worth and cash flow to gain insights into the current financial situation.
Net Worth:
Calculate and evaluate the case study’s net worth by considering all assets, liabilities, and equity. Discuss the implications of the net worth analysis.
Cash Flow:
Examine the cash inflows and outflows to determine the case study’s cash flow position. Analyze cash flow patterns and offer suggestions for improvement.
Strategies:
Present a comprehensive set of financial strategies tailored to the case study’s goals and financial situation. Include strategies for investment, risk management, tax planning, and more.
Insurance Coverage:
Evaluate the existing insurance coverage and propose any necessary adjustments or additional policies based on the case study’s needs and risk profile.
Retirement:
Develop a retirement plan, considering retirement goals, sources of income, and investment strategies to ensure a secure and comfortable retirement.
Education:
If applicable, outline a plan for funding education expenses, taking into account the case study’s objectives and time horizon.
Major Purchase:
If relevant, provide recommendations and financing options for significant purchases, considering the impact on the overall financial plan.
Emergency Fund:
Suggest an appropriate emergency fund amount and location for the case study individual or family.
IPP (Individual Pension Plan):
Analyze the suitability and benefits of an Individual Pension Plan for the case study’s retirement needs.
Estate Analysis and Discussion:
Evaluate the case study’s estate planning requirements, including wills, trusts, and distribution of assets.
Selling the Business:
If applicable, develop a tax-efficient strategy for selling the case study’s business and handling the proceeds.
Tax Planning for Selling the Business:
Present a comprehensive tax planning approach for the case study’s business sale, considering applicable tax laws and regulations.
Submission:
Please study the individual project rubrics carefully before the submission.
Only PDF file is acceptable.
FNCE 627: Case Study and guideline
Guideline
Please submit 8-10 pages (excluding cover page, table of contents and References) of a written financial plan following the table of contents as outlined below.
1.0 Introduction
2.0 Assumptions and Key Considerations
3.0 Financial Analysis
3.1 Balance sheet
3.2 Cash Flow statement.
4.0 Emergency fund
5.0 Insurance coverage
6.0 Children’s Education
7.0 Retirement planning and Individual pension plan (IPP)
8.0 Major purchase and asset allocation
9.0 Estate planning
10.0 Tax planning for selling the Business.
11.0 Recommendations and conclusion
The report has to be written using APA format i.e,
1. Double-space all text, including headings.
2. Use an accessible font (e.g., Times New Roman 12pt., Arial 11pt., or Georgia 11pt.).
There will be a 5 % reduction of mark for any additional one page of report. You must cite at least 5 peer-reviewed journals in addition to textbooks and other references. APA format of citation must be used. The rubric is attached here on Brightspace.
You are provided with the David’s family ‘s annual gross household income which is their salary and dividend from their business. You are supposed to
· calculate their home take income
· Estimate or assume their annual personal expenses using data from cost of living, https://www.numbeo.com/cost-of-living/in/Vancouver
or stat Canada https://www.statcan.gc.ca/en/topics-start/food-price?HPA=1
· Make sure that all the 6 points at the end of the case study below must be addressed in your report.
· A screenshot of the financial statements must be added to the body of the report, not in an appendix.
Note, turn in one pdf file only – good luck!
CASE STUDY
David Hill: DOB December 31, 1980
Sherry Hill: DOB May 12, 1982
David and Sherry have been married for 15 years and appear to have a stable and committed relationship.
They have three children:
Divan: DOB March 5, 2014
Ruth: DOB May 12, 2012
Zael DOB Dec 23, 2010
In June of 2018 David launched a technology-based business in the garage of their home in West Vancouver. He wanted to work with other socially conscious entrepreneurs. They have become increasingly successful and last year’s revenues were about $2 million. They expect to do better than that next year. Sherry works 20 hours a week in the business and takes a salary of $95,000 annually. David’s salary is $160,000. They each take dividends from the corporate account of about $25,000 annually.
They have been instructed by their accountant to maximize their contributions to their RRSP’s which are now: Sherry: $300,000 David: $350,000. They also have a joint investment account valued at $4,000,000. They have a corporate account (Hill Holdings LT) that has only cash in it: $1,500,000 CAD and $600,000 USD. Many of their clients pay in US funds and their accountant has instructed them to keep it in that currency. They purchased a lot in Hawaii valued currently at $300,000 USD and are wanting to build on it in the next three or four years. In the meantime, they are strategizing ways to get a townhouse at Whistler. They are avid skiers and love the outdoors. They are very devoted to the family and getting as much time as possible with the kids while they are young.
They are planning to sell the business later this year. With the growth trajectory they currently have, the calibre of the staff they currently employ and projections for future revenue, Hill has had an estimate from a CPA friend of his that the business (and its intellectual property) could probably sell for between $11 and $13 million USD. But the friend also advised that if he waits for the patent for one of his side projects to come through it could be as high as $20 million USD.
They have a moderate lifestyle. They have asked us to weigh in on:
1) What they should do regarding selling the business.
2) Education for the kids
3) Tax planning for when they sell the business.
4). What kind of insurance they should have.
5) How much they might need to have to never work again and maintain their current lifestyle
6) How they should invest their funds.
Good luck!
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Individual -Assignment
Major Parts of the report
Weight (%)
Excellent (8.5-10)
Good (7.6-8.4)
Satisfactory (6.8-7.5)
Marginal/Unsatisfactory (0-6.7)
Assumptions and key considerations
10
All five assumptions and its key considerations are described individually and clearly.
There are one or two assumptions that are not described individually or clearly.
There is a single significant error or several minor problems.
Several assumptions lack clarity in that they have no assumptions written down.
Financial and Estate analyses: Actual Cash Flow Statement, Income/ Expenses, and Balance Sheet. All the questions in the case study are addressed.
60
Tracked cash flow and balance sheet assets and liabilities included in detail and Income/Expenses includes two pie charts, all the 6 questions are addressed
Tracked cash flow, income/expenses, and/or balance sheet included but lacking details. One or two of the questions are not addressed
Tracked cash flow, income/expenses, and or balance sheet partially included. Three or more questions are not addressed
No cash flow tracking, pie charts, or balance sheet assets and liabilities. Only one question or no question is addressed
Estate planning: Factors to be considered in estate planning should be listed and discussed
10
At least 5 factors to be considered in estate planning have to be listed and discussed
At least 3 factors to be considered in estate planning have to be listed and discussed
At least 1 factor to be considered in estate planning have to be listed and discussed
No factor or only one factor to be considered in estate analysis is analysed and discussed
Recommendations
10
Specific recommendations provided that go beyond the expected scope of the case fully supported by data, alternate viewpoints fully considered
Specific recommendations provided that are substantially correct, alternate viewpoints may be considered
Recommendations provided that are partially correct, alternate viewpoints not considered
Recommendations provided that are mostly incorrect or absent
References, grammar, sentence structure, paragraphing, vocabulary, spelling, punctuation and clarity
10
References used are cited using APA format both in the text and the list of references. Text messages are clearly expressed using proper writing mechanics. There are no mistakes.
Minor mistakes in reference citation using APA format. There are very few minor issues with writing mechanics
Significant mistakes in using APA format. Multiple items are not described individually or clearly.
APA format is not followed in citation of references. Several items negatively impact clarity, grammar, spelling or structural errors, colloquialisms, and unknown abbreviations.
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