Networth ?

This query is : Resolved

Share Report Follow Query Ask a Query

shibu

shibu (Querist)
Follow

06 November 2012 Can anyone explain what is networth ?

CA Dhiraj Ramchandani

CA Dhiraj Ramchandani (Expert)
Follow

06 November 2012 Net worth of any company is its total assets excluding all third party liabilities...

CA Dhiraj Ramchandani

CA Dhiraj Ramchandani (Expert)
Follow

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)
Follow

07 November 2012 Is it mean Total Assets excludes Misc expenditure ?

CA Dhiraj Ramchandani

CA Dhiraj Ramchandani (Expert)
Follow

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)
Follow

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)
Follow

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)
Follow

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)
Follow

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..

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now