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Definition of net worth

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(Querist)
22 October 2012 Hi all,

Please advise whether following is correct formula to arrive at Net worth:

Share Capital plus Reserves and Surplus (incl. credit balance of P&L Account) less debit balance of p&l account

I am taking the following base "The word “Net worth” as defined under the Companies Act, 1956 as sum of paid up capital and free reserve. “Free Reserves” means all reserves created out of profits and share premium but do not include reserves created out of revaluation of assets, write back of depreciation provisions and amalgamation."

Rgds,
Ramesh
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CA Ayush Agarwal

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CA Ayush Agarwal (Expert)
22 October 2012 Yes, You are rite.
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CA BHARATH KUMAR

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CA BHARATH KUMAR (Expert)
22 October 2012 absolutely correct
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SANYAM ARORA

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SANYAM ARORA (Expert)
22 October 2012 Yes you are right
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CA Lokesh Pokharna

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CA Lokesh Pokharna (Expert)
22 October 2012 correct, but consider true aspects for analysis purposes
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