ENTREPRENEURSHIP

Detailed explanation-1: -Your wealth can be measured using the personal cash flow statement. Savings should be included in your list of cash inflows when creating the personal cash flow statement. The amount you owed on your credit card is an example of a liability.

Detailed explanation-2: -A personal cash flow statement can help you understand how much money flows into (inflows) and out of (outflows) your finances and your overall net cash flow. As a result, you’ll glean a clearer picture of your overall financial health.

Detailed explanation-3: -Wealth is measured on the personal net worth statement. One way to increase wealth is to spend less than you make. A personal net worth statement lists income and expenses. A tradeoff is the value of what you are giving up when you make a purchase.

Detailed explanation-4: -A personal cash flow is important because it allows you to identify where your income is coming from and how it is being spent. You can then use this knowledge to determine how many everyday expenses you are willing to sacrifice so that you can have more surplus to put towards future goals.