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What Are the Main Components of a Personal Balance Sheet

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Essay

What are the main components of a personal balance sheet and a cash flow statement? What is the main purpose of each of these personal financial statements?


Definitions:

Free Cash Flow

The amount of cash generated by a business after accounting for capital expenditures, essential for expansion, dividends, and debt repayment.

Dividends

Payments made by a corporation to its shareholders, often as a distribution of profits.

Operating Activities

Transactions and events related to the primary operations of a business, including revenue and expense activities.

Accounts Receivable

Funds that clients or customers are required to pay to a business for products or services delivered on credit.

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