2006-09-14 00:42:01 · 7 answers · asked by dupontx07 1 in Business & Finance ➔ Personal Finance
is the total assets minus total liabilities of an individual or company. For a company, this is called shareholders' equity or net assets.
To calculate net worth, there are two primary approaches. The first is to value all assets and liabilities at the value they were obtained, less depreciation or plus appreciation. This is typically done in accounting to produce companies' balance sheets. The disadvantage of this approach, is that the value at which an item is listed, might not be the amount that you receive when you try to sell it. To remedy this problem, assets are sometimes marked to market. This means, that the value that is used for an item is that at which you can sell it in the open market. Using this method net worth will vary, as prices on the open market vary. It is sometimes difficult to find a mark to market for illiquid assets, such as real estate and shares in unlisted companies. The estimate has to be made then based on readily available comparable valuations.
2006-09-14 00:45:26 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Net worth is the value of all a person's possessions and assets after you deduct for any debts or liability they have.
It is same as getting your gross pay and then after taxes and such you end up with net pay which is what you actually get.
2006-09-14 00:45:50 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Net worth means what you own (known as assets) minus what you owe (known as liabilities).
let's take the simple case:
You own a house valued at $100,000, but you still owe the bank $70,000.
Your friend owes you $1000, but you owe another friend $2000.
Your credit card bills that you still have not paid is $500.
You have $150 cash in your pocket and another $240 in your bank account.
Assume that you own nothing else and owe nothing else.
Your total assets=$100,000 + $1000 + $150 + $240 = $101,390
Your total liabilities=$70,000+$2000+$500=$72,500.
Your net worth = $101,390 - $72,500 = $28,890.
2006-09-14 00:57:06 · answer #3 · answered by Jacob Gan 2 · 0⤊ 0⤋
Net worth is kinda like a grand total if you know what I mean.
2006-09-14 00:44:07 · answer #4 · answered by Nickname 3 · 0⤊ 0⤋
Net worth is what you have after taxes are taken out of your gross assetts. That would make your gross is what you truly made.
2006-09-14 00:48:26 · answer #5 · answered by Anonymous · 0⤊ 0⤋
SIMPLE ASSETS MINUS LIABILITIES = NET WORTH
2006-09-14 10:13:36 · answer #6 · answered by Anonymous · 0⤊ 0⤋
After deductions ! Tax, fees etc!
2006-09-14 00:53:09 · answer #7 · answered by Anonymous · 0⤊ 0⤋