Net worth formula: The net worth of an individual

The net worth of an individual or a company can be calculated easily by using the net worth formula. The formula states that the net worth of an individual is the difference between the sum of assets owned and the sum of liabilities owned by them. Net worth tracks progress, identifies areas for improvement, and guides strategic decisions. Net Worth Formula Net Worth = Total Assets - Total Liabilities Understand the Component of Net Worth 1. Assets: Everything the company owns that has monetary value. This includes: Tangible Assets: Cash, inventory, equipment, real estate, etc. Then, finally, one has to subtract the net liability from the net asset to get the formula of Net-worth as shown below: Net worth = total assets – total liabilities You can use this Net Worth Calculator to evaluate your current net worth. This gives you an indication of the overall strength of your finances. Your net worth is the difference between the total value of everything you own (your assets) and the total value of everything you owe (your debts)