Net worth for a new enterprise

The net worth of any company will help investors judge the risks and benefits. This process is quite simple for large businesses. But for small businesses, it's not as simple as it may seem. 

No matter what the business is, the basic formulae for calculating the net worth is the same. This will help convince investors. If not, a working capital finance could be a good option to fund your new enterprises. But, let's talk about net worth first. Again, it's pretty straightforward to calculate a company's net worth:

Total assets minus total liabilities = net worth. 

Now let us have a look at the procedure:

• List your assets

Make a list of all of your assets. Assets are different for every business. Try to add as many as you can. It can also help you identify your liabilities. You can use your key progress indicators like user growth rate, customer success rate, etc. Remember, your trusty team is also an asset.

• Pick a business model

Do your research and choose the right model for your business. Some of the most famous methods for this are:

• • Berkus Method
  • Risk Factor Summation Method
  • Cayenne Consulting Calculator 

• Sort out your liabilities

This is the final task that you'll need to do. After doing this apply the data to the above-mentioned formula.

Now, having all of this information at your fingertips can help you convince investors. Apart from investors working capital finance could be a good option to fund your new enterprises.

Net worth = (Total paid-up share capital + reserves out of profit + securities premium account) – (accumulated losses + expenditure + miscellaneous expenditures which are written off).

@ Prasad Nilugal gave me this formula from tax act.