| Course | MT421 Financial Planning |
|---|---|
| Unit | Unit 3 |
| Paper type | Net worth statement |
| Length | About 900 words, 6 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | BS in Business Administration |
| Updated | October 2026 |
Free sample paper for MT421 Unit 3
Minus $5,260 on September 30: An MT421 Unit 3 Net Worth Statement With Every Value Sourced
[Student Name]
Purdue University Global
MT421: Financial Planning
Unit 3 Net Worth Statement
[Instructor Name]
[Date]
Kayla Brooks and her balances are a composite; valuation methods follow the cited sources, which are real.
The Statement
The statement is dated September 30 and shows what Kayla owns and owes on that day only. Rent, groceries and paychecks belong to the budget from Unit 2 and are left out here, because a statement of position records balances, not flows.
Liquid assets total $4,040: checking of $1,640 and savings of $2,400, both from the September 30 bank statements. Invested assets total $12,900, the vested balance of her 401(k). Use assets total $16,700: her car at $13,200 and household goods at $3,500. Total assets are $33,640.
Liabilities total $38,900. The furniture store card carries $1,240 at 29.99 percent with a $40 minimum. The Visa carries $4,860 at 26.24 percent with a $146 minimum. A personal loan carries $2,900 at 13.9 percent with a $120 payment. The car loan carries $11,300 at 7.4 percent with a $318 payment. Federal student loans carry $18,600 at 5.5 percent with a $221 payment.
Net worth, assets less liabilities, is minus $5,260.
How Each Line Was Valued
Each asset is valued at what Kayla could realistically turn it into today, not what she paid. Cash is valued at its statement balance. The 401(k) is valued at its vested balance of $12,900. Her plan statement shows a further $1,300 of employer matching contributions that vest only after three years of service, and she has two; that $1,300 is footnoted and excluded, because she would forfeit it if she left her job tomorrow.
The car was bought for $19,800 three years ago. It appears at $13,200, the private-party value a used-car pricing guide gives for its model, mileage and condition, because that is what a buyer would pay. Household goods appear at $3,500, a resale estimate built from listings for comparable used furniture and electronics. Their purchase cost was close to $9,000, and showing that figure would overstate her position by more than $5,000.
Liabilities are valued at their payoff balances on the same date, from each lender's September statement, so assets and debts describe the same day.
The car and the furniture together are worth about $12,000 less than they cost, and the car's share of that loss is still being paid off at 7.4 percent.
Four Ratios
The liquidity ratio divides liquid assets by monthly essential spending, the fixed and variable costs from Unit 2 that total $3,044. At $4,040, Kayla's liquid assets cover 1.3 months. Panels of planners asked to set benchmarks for household ratios, as Greninger et al. (1996) did, generally look for several months of reserve, so this is thin but not empty.
The debt-to-asset ratio divides total debt by total assets: $38,900 over $33,640 is 1.16. She owes more than she owns, which is what a negative net worth means, stated as a ratio.
The debt-payment ratio divides monthly debt payments by take-home pay: $845 over $3,813.59 is 22 percent. Over a fifth of every paycheck is committed before she buys groceries.
The savings ratio divides monthly saving by gross pay. Her 401(k) contribution of $194.67 and the employer match of $97.33 total $292, or 6 percent of gross. All of it is retirement saving; nothing is going to the emergency reserve.
Reading the Result
A negative net worth at 29 is common, and it says less about Kayla's habits than about where her debts come from. Of the $38,900 she owes, $18,600 is student debt for the degree that produces her salary, and $11,300 is the loan on a car she needs to reach work. Those two are offset by income and by a vehicle worth more than the remaining loan. The trouble sits in the smaller balances: $9,000 of card and personal-loan debt at rates between 13.9 and 29.99 percent, backed by no asset at all. Lusardi et al. (2011) found that a large share of American households could not readily come up with $2,000 in an emergency, and Kayla's position, with $2,400 of savings and a card that is still growing, is close to that edge. The Federal Reserve's latest survey of household finances found that 63 percent of adults would pay an unexpected $400 expense entirely with cash or its equivalent, so about 37 in every 100 would need to use credit or another route (Board of Governors of the Federal Reserve System, 2025).
The direction of travel matters more than the sign. Each month, her payments reduce debt by more than the interest added, her 401(k) grows, and the car loses value. The next statement will show whether the first two outrun the third.
Target for March 31
The target for the next statement, six months on, is a net worth at or above zero. It rests on three projections. Following a repayment plan that commits about $1,095 a month to debt should reduce balances by about $4,800 over six months. Continued 401(k) contributions and the match add $1,752 before any growth. The car should lose about $1,000 of value. Those changes total about plus $5,500, enough to carry the figure from minus $5,260 to a small positive number. The liquidity ratio should not fall below its current 1.3 months while that happens.
References
Board of Governors of the Federal Reserve System. (2025). Economic well-being of U.S. households in 2024. https://www.federalreserve.gov/publications/report-economic-well-being-us-households.htm
Greninger, S. A., Hampton, V. L., Kitt, K. A., & Achacoso, J. A. (1996). Ratios and benchmarks for measuring the financial well-being of families and individuals. Financial Services Review, 5(1), 57-70. https://doi.org/10.1016/S1057-0810(96)90027-X
Lusardi, A., Schneider, D., & Tufano, P. (2011). Financially fragile households: Evidence and implications. Brookings Papers on Economic Activity, 2011(1), 83-134. https://doi.org/10.1353/eca.2011.0002
MT421 Unit 3 instructions, in plain terms
Unit 3 asks students to prepare a statement of financial position for themselves or a case client on a specific date. Instructors expect assets grouped as liquid, invested and use assets, each valued at fair market value on that date rather than purchase price. Retirement accounts should be shown at their vested balance. Liabilities should be listed at payoff balances from the same date, with the interest rate and monthly payment beside each. Net worth is assets minus liabilities. Most prompts ask for several ratios, such as liquidity, debt to assets, debt payments to income and a savings rate, each with its formula and an interpretation. Cash flow items like rent belong in the budget, not here. A target for the next statement date is often requested and should be built from projections.
How this MT421 Unit 3 example is built
This sample starts by fixing the date and explaining why rent and paychecks stay out. Assets come first by group, then the five debts with rates, then the result. The valuation section justifies each line: vested 401(k), the car at its private-party value and furniture at resale, under a highlighted line showing about $12,000 of value lost against cost. Four ratios are computed with their inputs and compared with planners' benchmarks of the kind Greninger and colleagues collected. The reading explains why a negative figure at 29 is common and which debts matter, citing Lusardi and colleagues and the Federal Reserve's $400 question. The target section builds a March 31 figure from expected debt paydown, retirement contributions and the car's depreciation.
Reading the MT421 Unit 3 grading rubric
Net worth statements are typically graded on correct valuation, a single consistent date, complete liabilities with rates, accurate ratios and interpretation. Purchase price used for vehicles or furniture is the error graders catch most often. Rubrics usually reward showing retirement balances at their vested amount. Credit goes to ratios with formulas and inputs shown, and more to interpretation that says what each figure means for this person. A negative net worth explained in context, with the debts that drive it and a direction of travel, scores better than one glossed over. Keeping cash flow items out shows the student understands the difference between position and flow. A March or year-end target built from named projections shows judgment, and sources belong in APA 7.
Common MT421 Unit 3 mistakes, and how to avoid them
The most frequent weak statement lists the car at what was paid for it, overstating assets by thousands of dollars. Another common error mixes balances from different months, so assets and debts describe different moments. Students often add unvested employer contributions to the 401(k) or leave interest rates off the debts, which makes the analysis impossible. Ratios are sometimes reported with no formula or meaning. Rent and grocery spending occasionally appear as liabilities. A negative result is often treated as failure rather than explained. Before submitting, check every value against one question: could this person turn it into that much money on the statement date? Then confirm each balance comes from a statement with the same date printed on it.
Get an MT421 Unit 3 example written to your instructions
Balances and debts are all a net worth statement needs, and a first custom statement built on your Unit 3 case costs nothing. Valuation notes and ratios follow the layout your rubric calls for, delivery takes 24-48h, and any value the case leaves out, a car's market price for instance, is estimated with its source named. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
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MT421 Unit 3 questions, answered
Should a car be listed at what I paid or what it is worth?
What it is worth on the statement date. A net worth statement reports market value, so use a recognized used-car pricing guide and name it. Purchase price overstates the asset because vehicles lose value quickly. The loan still appears in full on the liability side, which is how the statement shows whether the car is worth more than is owed.
Is a negative net worth a problem for the assignment?
Not at all. Early-career statements are often negative because of education or vehicle debt. What matters is accurate valuation and sensible interpretation: why the figure is negative, which debts drive it, and how the planned actions change it. The sample treats its negative result as a baseline and projects when it turns positive.
Which ratios belong on an MT421 net worth statement?
Check your prompt and course text first. Common choices include a liquidity ratio, debt to assets, debt payments to income and a savings rate. Show the formula and the inputs for each, then say what the figure means for this person. Three or four well-interpreted ratios score better than a long unexplained list.
Where can I find a free MT421 Unit 3 sample paper?
This page holds the complete MT421 Unit 3 net worth statement, valuing every asset a Knoxville renter owns and arriving at minus $5,260.
Why is unvested match money left off the MT421 Unit 3 sample statement?
Kayla would forfeit the $1,300 if she left her job before three years of service, so counting it would credit her with money she does not yet own.