Investor Glossary-net worthInvestor Glossary-net worthInvestor Glossary-net worthInvestor Glossary-net worthInsightful 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 Worth

The HTML to link to this page
 

Net worth is total assets minus its total liabilities. Put another way, net worth represents the owners' interest in company assets, as opposed to liabilities, which represents creditors' interest. If a firm has little net worth, its assets are mostly financed by debt, and it will have trouble paying its bills in hard times. (A company can have negative net worth -- liabilities exceed assets -- although bankruptcy is probably near.). But a high net worth company with few liabilities may be squandering opportunities by refusing to take out loans. Net worth has limits as an indicator, however, because it uses historical accounting figures, some of which won't reflect current value. Moreover, net worth doesn't indicate how liquid the company's assets are, nor how immediate its liabilities. Net worth is also computed for people, the more fortunate of whom are "high net worth individuals." But note that a newly minted doctor with negative net worth of $50,000 from medical school loans has entirely different financial prospects than an unskilled laborer with the same negative net worth.



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


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | 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