Financial management
This query is : Resolved
Elton Henriques
(Querist)
20 October 2013
how to calculate the net worth of a company?
20 October 2013
worth means equity . equity is defined as
residual interest in the assets of the enterprise
after deducting all its liabilities . thus , equity is
the excess of aggregate assets of an enterprise
over its aggregate liabilities . It is calculated as
Fixed assets + investments + current assets
and loans and advances +deferred tax asset- all
outside liabilities including deferred tax liability
OR Share Capital + Reserves and Surplus -
Miscellaneous Expenditure ( to the extent not
written off ) deferred tax liability/asset is a
liability which arise in the current period due to
timing difference and will reverse in future .
therefore the same is required to be considered
while calculating Net Worth .
residual interest in the assets of the enterprise
after deducting all its liabilities . thus , equity is
the excess of aggregate assets of an enterprise
over its aggregate liabilities . It is calculated as
Fixed assets + investments + current assets
and loans and advances +deferred tax asset- all
outside liabilities including deferred tax liability
OR Share Capital + Reserves and Surplus -
Miscellaneous Expenditure ( to the extent not
written off ) deferred tax liability/asset is a
liability which arise in the current period due to
timing difference and will reverse in future .
therefore the same is required to be considered
while calculating Net Worth .
Nikhil Kaushik
(Expert)
21 October 2013
depending upon purpose for calculating net worth, revaluation reserves may be excluded for arrive at actual net worth on account of business operations.
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