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Net worth

Net worth

Net worth is the value of all the non-financial and financial assets owned by an institutional unit or sector minus the value of all its outstanding liabilities.[1] Since financial assets minus outstanding liabilities equal net financial assets, net worth can also be conveniently expressed as non-financial assets plus net financial assets. Net worth can apply to companies, individuals, governments or economic sectors such as the sector of financial corporations or to entire countries.[2]

By entity


Net worth in business is also referred to as (own) equity. It is generally based on the value of all assets and liabilities at the carrying value which is the value as expressed on the financial statements. To the extent items on the balance sheet do not express their true (market) value, the net worth will also be inaccurate. On reading the balance sheet, if the accumulated losses exceed the shareholder's equity, net worth becomes negative.

Net worth in this formulation does not express the market value of a firm: a firm may be worth more (or less) if sold with a going concern.


For individuals, net worth or wealth refers to an individual's net economic position, the value of the individual's assets minus liabilities. Examples of assets that an individual would factor into their net worth include retirement accounts, other investments, home(s), and vehicles. Liabilities include both secured debt (such as a home mortgage) and unsecured debt (such as consumer debt or personal loans). Typically intangible assets such as educational degrees are not factored into net worth, even though such assets positively contribute to one's overall financial position.

For a deceased individual, net worth can be used for the value of their estate when in probate.

Individuals with considerable net worth are listed as High-net-worth individuals and Ultra high-net-worth individuals.[3]


Balance sheets that include all assets and liabilities can also be constructed for governments. Compared with government debt, a government's net worth is an alternative measure of the government's financial strength.


A country's net worth is calculated as the sum of the net worth of all companies and individuals resident in this country, plus the government's net worth. As for the United States, this measure is referred to as the financial position.


Citation Linkopenlibrary.orgSystem of National Accounts 2008, published by the European Commission, the International Monetary Fund, the Organisation for Economic Co-operation and Development, the United Nations, and the World Bank, p. 49, section 3.109.
Sep 24, 2019, 3:48 AM
Citation Linkwww.nytimes.comRon Lieber (May 12, 2010). "Net-Worth Obsession". The New York Times.
Sep 24, 2019, 3:48 AM
Citation Linkwww.thesundaytimes.co.ukRay Hutton (5 November 2006). "Rich spurn ultra-luxury cars". UK: The Sunday Times. Retrieved 10 September 2013.
Sep 24, 2019, 3:48 AM
Citation Linkwww.bankrate.comNet Worth Calculator
Sep 24, 2019, 3:48 AM
Citation Linkwww.nytimes.com"Net-Worth Obsession"
Sep 24, 2019, 3:48 AM
Citation Linkwww.thesundaytimes.co.uk"Rich spurn ultra-luxury cars"
Sep 24, 2019, 3:48 AM
Citation Linkwww.bankrate.comNet Worth Calculator
Sep 24, 2019, 3:48 AM
Citation Linken.wikipedia.orgThe original version of this page is from Wikipedia, you can edit the page right here on Everipedia.Text is available under the Creative Commons Attribution-ShareAlike License.Additional terms may apply.See everipedia.org/everipedia-termsfor further details.Images/media credited individually (click the icon for details).
Sep 24, 2019, 3:48 AM