Every time we read about the Net Worth of Billionaires, Millionaires, and Celebrities, we are very amazed by their values. But it is important to know what exactly does Net Worth actually mean? Net Worth is not the income earned by the person per annum neither it is his total cumulative income for the years, neither it is his earnings or investments, nor his loans or liabilities, it is actually something which is a mixture of all the above stated things.
It is important to understand how do we calculate and arrive at the figure of Net Worth. In this detailed guide here, you will get to know what actually Net Worth is and how can we calculate it. What are the things that we need to keep in our mind?A) Net Worth Definition
Net worth is simply the difference between the asset and the liability. Net worth is a measure of entity’s worth and hence is also known has owner’s worth or shareholder equity. Net worth can be calculated for an individual, firms or companies, or even countries.B) What makes net worth?
As per the definition, net worth consists of assets and liabilities. To understand net worth, one needs to first understand assets and liabilities.C) Assets
Assets are the items which are owned by a person or company. Assets consist of cash and cash equivalents, inventory, plant and machinery, building etc. For calculating net worth, one must first identify the current market value of assets.
D) Liabilities
E) How to calculate net worth
The simple formula to calculate net worth is:Net Worth = Assets minus Liabilities.
F) Net Worth of a Company
Investors consider a lot many things while considering investment in a company because investors want to understand at what level the company is operating at present, what are the potential opportunities for the company, how the company is valued etc. So it becomes necessary to know what the net worth of the company is.| Apple Net Worth | Facebook Net Worth |
| Samsung Net Worth | Amazon Net Worth |
| Infosys Net Worth | TCS Net Worth |
| Reliance Net Worth | More Companies |