Investor Glossary-net assetsInvestor Glossary-net assetsInvestor Glossary-net assetsInvestor Glossary-net assetsInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Net Assets

The HTML to link to this page
 

Net assets (also known as owners equity, shareholders equity, or net worth) is the total assets minus the total liabilities of a company or individual. Thus if total assets is $100,000 and total liabilities is $80,000, net assets is $20,000. Net assets represents the portion of assets financed by owners capital, as opposed to creditors capital. On the balance sheet, net assets comprises both capital stock and additional paid-in capital, which represent monies paid into the company for its shares. Net assets also includes retained earnings, the portion of accumulated net income not paid out as dividends. Companies want to ensure their net assets is sufficient to meet their current obligations, even when business turns sour. On the other hand, net assets can also be too high. When a company avoids debt entirely - i.e., its net assets equals its total assets -- it may be foregoing profitable business opportunities that could be financed through bonds. Finally, note that net assets is used in similar fashion (ie, total assets less liabilities) to describe the net worth of a mutual fund.



Rate this net assets definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: inflation, EBITDA, average price per share, current ratio, FTSE, 1035 exchange, LIBOR, annual return, deferred revenue, option premium, 401a, command economy, open position, real GDP, implied volatility, in escrow, quality assurance, cancelled check, dividends payable, covered put, stock split, 1031 exchange, class C shares, required rate of return, ex-dividend, limit order, risk management, Zero Cost Collar, reverse mortgage, minority interest, VIX, deferred tax, Key Rate Duration, margin rate, wholly-owned subsidiary, APR, 144a, diluted share, stock market close, FICO score, ex-dividend date, phantom income, per diem, debt service coverage, balance sheet, retained earnings, irrevocable trust, labor relations, liquidity ratio


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use