Networth ?

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shibu

shibu (Querist)
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06 November 2012 Can anyone explain what is networth ?

CA Dhiraj Ramchandani

CA Dhiraj Ramchandani (Expert)
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06 November 2012 Net worth of any company is its total assets excluding all third party liabilities...

CA Dhiraj Ramchandani

CA Dhiraj Ramchandani (Expert)
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06 November 2012 Or else, consider all equity funds, as in equity share capital, reserves & surplus, etc and deduct misc. exps from it..

shibu

shibu (Querist)
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07 November 2012 Is it mean Total Assets excludes Misc expenditure ?

CA Dhiraj Ramchandani

CA Dhiraj Ramchandani (Expert)
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07 November 2012 No no., its total assets less third party liabilities.. here total assets include misc exps..

CA Dhiraj Ramchandani

CA Dhiraj Ramchandani (Expert)
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07 November 2012 Now, apart from above formula, there is another way to calculate networth..., its total of all equity funds less misc exps..

shibu

shibu (Querist)
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07 November 2012 So Total Asset = (FA+CA+M.Exp)

NW= TA- Third party liabilities.
ok
Now how it will be same as : Equity funds-Mis Exp.

eg.,
TA =(3+4+2)= 9
Here 2 is Mis exp
3rd party Liabilities = 2
NW=7

So Equity fund should be (9-2)= 7
2 is third party liabilities
Now if we deduct Misc exp !

CA Dhiraj Ramchandani

CA Dhiraj Ramchandani (Expert)
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07 November 2012 Ohkk sorry, so we r suppose to exclude misc exp while calculating the total assets.. thanx for clarifying..

CA Dhiraj Ramchandani

CA Dhiraj Ramchandani (Expert)
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07 November 2012 i had this conceptual error.., misc exps are as such not part of net worth., so in either of the formulas, you are suppose to exclude misc exps..

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Networth ?

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