Net worth in simple words refers to net assets which imply total assets less total liabilities of the company. In order to calculate net worth of a company one should add Equity share capital, Preference share capital, Reserves and Surplus available with the firm and deduct from this all fictitious assets or intangible items like miscellaneous expenditure, preliminary expenses and so on.
Debts are not considered in the calculation of net worth of the company. It is also called owner’s equity as it does not include outsider’s debt like debentures, long term loan, bank loan etc
Example:
Given a firm has the following financial figures in its balance sheet, what is its net worth?
- Capital: Rs 12 lac
- Reserve: Rs 4 lac
- Unsecured loan: Rs 5 lac
- Current assets: Rs 16 lac
- Pre operative expenses: Rs 2 lac
Hence: Net Worth = Capital + Reserve - Pre-operative Expenses
= 12 Lac + 4Lac − 2Lac
Net Worth = 14Lac
-------------
Subscribe to our Youtube channel: https://www.youtube.com/
Download the FREE app from Google Play store: JAIIB Practice Exams Lite - More than 10K + Satisfied customers
Download the FREE CAIIB app from Google Play store:Click here
Download FREE Banking terms and interview questions explained for competitive exams: Click here
Follow us on Facebook for more updates: TutionCentral - CAIIB/JAIIB
The caiib pro app is not being able to be purchased kindly arrange an alternative way sir
ReplyI will be glad to pay the money
I doubt your explanation that debt is not considered for calculation of net worth. It is ridiculous
ReplyPCNSE exam dumps - Free Palo Alto Networks Palo Alto Networks Certified Network Security Engineer Exam Questions & Dumps. 100% Free PCNSE ETE Files With Updated
ReplyThanks for this post ,author of this post share good information
ReplyIf You Want Wo Get Highly Up To Date VMware 3V0-752 Exam Dumps You Should Go With certificationreviews .Customer satisfaction is the first priority of this website and 100% money back guarantee, if you fail and not satisfied with our offer.
ReplyI For more solved Questions on CAIIB - Download the FREE CAIIB app from Google Play. There is no better time to buy a home than right now!
ReplyThanks,
CambridgeHomeLoan.com is here for you.
tampa home loan
Tampa loan
Adobe AD0-E106 dumps Get expert Question & Answer Dumps PDF Online. We Provide latest IT Certification Exams PDF for preparation Study Guide Test Practice for Success in exams. This is an online education portal
ReplyIncredible tips and straightforward. This will be exceptionally helpful for me when I get an opportunity to begin my blog. Long-Term Loans
ReplyHi, I just discovered your weblog via yahoo. Your article is truly pertinent to my life currently, and I’m really happy I discovered your website.dotaqq
ReplyI think this is an informative post and it is very useful and knowledgeable. therefore, I would like to thank you for the efforts you have made in writing this article. Clean Eating On The Cheap Ebook
ReplyInitial You got a awesome blog. I determination be involved in plus uniform minutes. I view you got truly very functional matters. I determination be always checking your blog blesss. stone necklaces
ReplyIncredible tips and straightforward. This will be exceptionally helpful for me when I get an opportunity to begin my blog. best yoga tops for large bust
ReplyGreat info! I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to say except that I have. best yoga mat for men
ReplyI have perused your article, it is exceptionally enlightening and helpful for me.I respect the profitable information you offer in your articles. Thanks for posting it. live22
ReplyI am always searching online for storys that can accommodate me. There is obviously a multiple to understand about this. I feel you made few salubrious points in Attributes moreover. houses for sale burnley
Replyhttps://www.lily.fi/blogit/certstests/cobit-2019-cobit-2019-foundation/
Reply