Net worth is the total wealth of a person, household, or company. Net worth is calculated by adding the value of all assets owned and subtracting liabilities (any money owed).
What is net worth?
- Net worth is a measure of wealth that equals the sum of assets minus liabilities.
- A company’s net worth is also known as its book value or shareholders’ equity.
- Net worth is a gauge of financial health.
The net worth of a company is also known as its book value or shareholders’ equity. A company’s net worth can be calculated by adding all assets and liabilities from its balance sheet.
An individual’s assets commonly include bank account balances, real estate, and investments among other material possessions. An individual’s liabilities, or money owed, can include credit card balances, mortgages, loans, and outstanding bills or taxes.