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Net worth/ratio analysis

Others 6798 views 6 replies

Pranav Dileep Potekar

Data Analyst

31 Points Joined August 2011

is share premium included in calculating shareholders fund or proprietary funds or networth?

shareholders fund or proprietary funds or networth=equity share capital+reserves and surplus +preference share capital-ficititious assets

what all is included in reserves and surplus?

should preliminary expenses and ficititious assets be considered the same?

i have a problem wherin preliminary expenses is given shoul i consider it as ficititious asstets for computing shareholders funds?

thanks

Replies (6)

ashish gupta

student

1922 Points Joined May 2008

yes preliminary expenses should be considered as fictitious assets. and share premium should be added in calculating the net worth

Phalgun

Audit Manager

327 Points Joined July 2009

Ageed wuth Ashish

sivaram

Asst Mgr-Taxation

6918 Points Joined April 2009

Another Formula to find Networth from Asset side

Fixed Assets +Working Capital

Mary Asha

Chartered Accountant

112 Points Joined February 2011

To Sivaram, that is not a formula for net worth.. It is a formula for calculating Total funds I.e capital employed/ investment..

CA Goutam Sharma

Chartered Accountant in Practice

468 Points Joined June 2011

WELL SAID MARY, PRELIMINARY EXPENSES WILL BE TREATED AS FICTICIOUS ASSET AND WILL NOT BE CONSIDERED FOR THE CALCULATION OF NET WORTH. HOWEVER, WHETHER ALL TYPE OF RESERVES (ie. REVALUATION RESERVE) IS CONSIDERED FOR CALCULATING NETWORTH IS A MATTER OF DOUBT FOR ME. LET MORE OF US COMMENT ON THIS