Net worth

Net worth (sometimes "net assets") is the total assets minus total liabilities of an individual or company. For a company, this is called shareholders' equity or net assets.

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To calculate net worth, there are roughly two approaches. The first is to value all assets and liabilities at the value they were obtained, less depreciation or plus appreciation. This is typically done in accounting to produce companies' balance sheets. The disadvantage of this approach, is that the value at which an item is listed, might not be the amount that you receive when you try to sell it. To remedy this problem, assets are sometimes marked to market. This means, that the value that is used for an item is that at which you can sell it in the open market. Using this method net worth will vary, as prices on the open market vary. It is sometimes difficult to find a mark to market for illiquid assets, such as real estate and shares in unlisted companies. An estimate has to be made then based on readily available comparable valuations.

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Asset: In business and accounting an asset is anything owned which can produce future economic benefit, whether in possession or by right to take possession, by a person or a group acting together, e.g. a company, the measurement of which can be expressed in monetary terms. Asset is listed on the balance ...

Liabilities: REDIRECT liability...

Company: A company in the broadest sense is an aggregation of people who stay together for a common purpose. Such usage includes people assembled...

Net worth related Images and Photos (experimental)

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