Net worth

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In business, Net worth (sometimes "net assets") is the total assets minus total liabilities of an individual or a company. For a company, this is called shareholders' equity and may be referred to as book value. Net worth is stated for a particular point in time.

In personal finance, net worth is also used to refer to an individual's net financial position; similarly, it also uses the value of all assets minus the value of all liabilities (debt).

Net worth in business is generally based on the value of all assets and liabilities at the carrying value, that is, the value as expressed on the financial statements. To the extent that items on the balance sheet do not express their true ("market") value, the net worth will also be inaccurate.

Net worth in this formulation is not an expression of the market value of the firm: the firm may be worth more (or less) if sold as a going concern.

See also

• Millionaire
• Billionaire
• High net worth individual

References

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Last updated on Sunday February 03, 2008 at 14:13:59 PST (GMT -0800)
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