Calculating net worth is crucial for corporate social responsibility (CSR) reporting, providing a snapshot of a company’s financial health. It represents the total value of a company’s assets minus its liabilities. For instance, a company with $100 million in assets and $60 million in liabilities would have a net worth of $40 million.
Net worth is a key metric for CSR as it reflects a company’s ability to fulfill its financial obligations and make investments that support social and environmental initiatives. Historically, the concept of net worth has evolved from simply measuring a firm’s financial stability to becoming an indicator of its long-term sustainability.