Determining a company’s financial health and stability is crucial for investors, creditors, and other stakeholders. One key metric used for this purpose is net worth, which represents the difference between a company’s assets and liabilities. Calculating net worth from a balance sheet is a fundamental skill for financial analysis.
Net worth provides a snapshot of a company’s financial position at a specific point in time. It indicates the value of the company’s ownership interest and serves as a measure of its solvency and overall financial strength. Historically, the concept of net worth has been used for centuries to assess the financial well-being of individuals and businesses.
