Definition of Net worth:
The value (of a business, etc.) after all liabilities have been deducted from the true market value, as opposed to the book value, of the assets; (now frequently) the total wealth of an individual, taking account of all financial assets and liabilities (especially debts).
Net worth is calculated by subtracting all liabilities from assets. An asset is anything owned and has monetary value, while liabilities are obligations that deplete resources. Positive net worth means that assets exceed liabilities, while negative net worth results when liabilities exceed assets. Positive and increasing net worth indicates good financial health while decreasing net worth is cause for concern as it might signal a decrease in assets relative to liabilities.
Net worth is the value the assets a person or corporation owns, minus the liabilities they owe. It is an important metric to gauge a company's health and it provides a snapshot of the firm's current financial position.
Value of a firm to its owners (stockholders/shareholders) as shown on its balance sheet. It is the sum of the issued share capital, retained earnings, and capital gains. Also called net value.
How to use Net worth in a sentence?
- Although the companys bank account was almost empty it has a large net worth because of all its assets, name recognition, and employees.
- Net worth is a quantitative concept that measures the value of an entity and can apply to individuals, corporations, sectors, and even countries.
- When the net worth of Sarahs company hit the lowest yet, Sarah decided it was time to make some dramatic changes to the company.
- She was more worried about his net worth of the man that his personality, she was a gold digger, she wasnt messing with a broke dude.
- In business, net worth is also known as book value or shareholders' equity. The balance sheet is also known as a net worth statement.
- Net worth provides a snapshot of an entity's current financial position.
- People with substantial net worth are known as high-net-worth individuals (HNWI).
Meaning of Net worth & Net worth Definition