NW & TNW

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J SREEKUMAR

J SREEKUMAR (Querist)
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14 August 2009 is there any difference between Networth & Tangible Net worth?

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14 August 2009 Dear Sreekumar

I would like to explain the difference between Networth and Tangible Networth through the following example (a balance sheet of XYZ ltd as on December 31, 2009)

Assets (Rs crore):
Intangible (Copyrights, Patents etc.): 100
Tangible (Plant & Machinery, Building): 300

Liabilities (Rs crore): 250

Equity Capital (Rs Crore): 150

Hence,

Networth= Total Assets - Total Liabilities (at book value)

=> Networth of XYZ Ltd as on December 31, 2009 (Rs crore) = 300-250=150

Whereas, Tangible Networth= Total Assets-Intangible Assets-Total Liabilities

=> Tangible Networth of XYZ Ltd as on December 31, 2009 (Rs crore)= 300-100-250=50

Trust, this assists you.

Best Regards

CA Himanshu Garg
ca.hims@gmail.com

J SREEKUMAR

J SREEKUMAR (Querist)
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15 August 2009 Can we treat long term borrowinngs as a part of Total Net worth? What are the other items we can add to Total Net Worth?