Quick Definition

Net worth is the total value of an individual's or entity's assets minus their liabilities.

Formula

Examples

• 1An individual with a home valued at $300,000, a car worth $20,000, and savings of $10,000, but with a mortgage of $200,000 and car loan of $15,000, has a net worth of $115,000.
• 2A business owning property worth $500,000, equipment valued at $100,000, and cash of $50,000, with debts totaling $400,000, has a net worth of $250,000.
• 3A retiree with a pension fund of $400,000, investments worth $200,000, and no debts, has a net worth of $600,000.

Tags