How to Calculate Net Worth of a Company? | Definition | Top Example

In this video on Net Worth of Company, we discuss its formula, calculation along with practical example.

𝐖𝐡𝐚𝐭 𝐢𝐬 𝐍𝐞𝐭 𝐖𝐨𝐫𝐭𝐡 𝐨𝐟 𝐚 𝐂𝐨𝐦𝐩𝐚𝐧𝐲?
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The company's Net Worth is nothing but firm's Book value or shareholder equity. The company's net worth is the value of the assets after paying off its debts.

𝐍𝐞𝐭 𝐖𝐨𝐫𝐭𝐡 𝐨𝐟 𝐚 𝐂𝐨𝐦𝐩𝐚𝐧𝐲 𝐅𝐨𝐫𝐦𝐮𝐥𝐚
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Net Worth of the Company = Total Assets – Total Liabilities.

𝐄𝐱𝐚𝐦𝐩𝐥𝐞 𝐨𝐟 𝐍𝐞𝐭 𝐖𝐨𝐫𝐭𝐡 𝐨𝐟 𝐚 𝐂𝐨𝐦𝐩𝐚𝐧𝐲
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Let's consider Mr B needs to calculate Net worth of a company PQR. It has following the information -

2016 (In US $) 2015 (In US $)
Total Assets (A) 62,15,000 63,10,000
Total Liabilities (B) 4,15,000 3,10,000

Net Worth (2016) = 6215000 - 415000 = 5800000

Net Worth (2015) = 6310000 - 310000 = 6000000

To know more about 𝐍𝐞𝐭 𝐖𝐨𝐫𝐭𝐡 𝐨𝐟 𝐚 𝐂𝐨𝐦𝐩𝐚𝐧𝐲, you can go to this 𝐥𝐢𝐧𝐤 𝐡𝐞𝐫𝐞:- wallstreetmojo.com/net-worth/

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