Net Worth

Net Worth is the total value of an individual’s or business’s assets, less its liabilities. It’s an important measure of financial health, providing a snapshot of what remains after all debts are subtracted from assets. For a business, net worth is often called shareholder equity, while for individuals, it's the difference between assets like savings, real estate, and investments, and liabilities like loans and credit card debt.

The formula for Net Worth is:

Net Worth = Total Assets - Total Liabilities

A positive net worth indicates that assets exceed liabilities, while a negative net worth means liabilities outweigh assets. Regularly tracking net worth helps businesses and individuals assess their financial position and plan accordingly.