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Net Worth refers to the difference between the total assets of a person or company and the total liabilities.
Net Worth refers to the difference between the total assets of a person or company and the total liabilities.
Net worth signifies the total value of assets minus liabilities for an individual or a company. It serves as a key metric indicating financial well-being. Evaluating a company's net worth is among the initial steps that investors undertake before investing in it.
If the total assets of a person or company exceed the liabilities, they have a positive net worth. Conversely, if the liabilities are higher than the assets, the net assets are negative. The increase in net assets can be achieved by increasing assets or reducing existing liabilities.
Net worth = Assets - Liabilities.
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