Net worth is the amount by which assets exceed liabilities. In simple words, it is the value of everything you own, minus all your debts. Net worth refers to the total value of an individual or company expressed as total assets less total liabilities. In the corporate world, net worth is also called shareholders' equity or Book Value.
A consistent increase in net worth indicates a good financial health. It means that assets are growing faster than debts. Conversely, when liabilities grow faster than assets, net worth decreases, this is an indication to financial hussle.
This step will finally determine your current NW. Calculate it by using this formula-
For illustration purpose, here's a calculation of net worth-
|Current Assets (CA)||INR|
|Current Liabilities (CL)||INR|
|Credit out standing||30,000|
|personal loan standing||1,00,000|
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A few general examples of assets are:
Examples of liabilities include: