What is the networth of a company ?
Company balance sheet are as follow :
Laibilities
Capital & Reserve = Rs. 17 Lac
Loans & Liability (including director loan) = Rs. 6.5 lac
Current Liabilities = Rs. 8.90 lac
Assets
Fixed Assets = Rs. 0.55 Lac
Current Assets = Rs. 11.65 lac
Misc. Assets (Incorporation Expenses) : Rs. 0.11 Lac
Loss of current & previous year : Rs. 20.07 Lac
Currently company in development phase ?
I wanted to know company networth. Kindly do the needful.
Under normal circumstances with no loss being suffered, networth=capital+reserves.
However in this case, networth = capital+reserves - accumulated losses
=17 lacs-20.07lacs = -3.07 lacs. Therefore networth is negative.
Sometimes misc. assets is also deducted to find out TANGIBLE networth. So in that case, networth will be 17-20.07-0.11= -3.18 lacs.
The Miscellaneous expenses to the extent not written off or the preliminary expenses should not be considered in calculating net worth...
Outside loans should also be deducted as it is a outside liability, Even the loan taken from director should be deducted.
so the correct net worth is
Assets (FA 0.55+ CA 11.65) - Liabilities (CL 8.90 + Loans 6.5) = Networth = (3.2)
negative net-worth
First your balance sheet is out by 0.02 lacs.
Formula of Networth is Share Capital + Reserves and Surplus - Misc. Exps.
Therefore Networth is -3.18 lacs.
One may even calculate considering Total Assets - Liabilities ( Except Share Capital & reserves & Surplus) - Misc. Exps. Then it will reflect -3.20 Lacs ( difference is due to difference in balance sheet )
One may calaculate by any formula, answer will be same by both the methods.
Regards,
Bhavin
CAclubindia
