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Net Worth Calculation (Corporate Law)

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This query is : Resolved



( Author )
05 December 2007

Dear Sir,

What item of Balance sheet to be considered for calculation of Net worth of Company?


R.V.RAO

( Expert )
05 December 2007

NET WORTH

Definition 1

For a company, total assets minus total liabilities. Net worth is an important determinant of the value of a company, considering it is composed primarily of all the money that has been invested since its inception, as well as the retained earnings for the duration of its operation. Net worth can be used to determine creditworthiness because it gives a snapshot of the company's investment history. also called owner's equity, shareholders' equity, or net assets.

Definition 2

For an individual, the value of a person's assets, including cash, minus all liabilities. The amount by which the individual's assets exceed their liabilities is considered the net worth of that person.
SOURCE:www.investorwords.com
FROM THE BALANCE SHEET LIABILITY SIDE PL.ADD SHARE CAPITAL. FREE RESERVES AND LESS MISCELLANEOUS EXP TO THE EXTENT NOT WRITTEN OFF (ASSET SIDE). OR
TOTAL ASSETS MINUS TO TAL LIABILITIES
R.V.RAO


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