How can I calculate my net worth?

Net worth is the monetary value of your business. To calculate your net worth, subtract your total liabilities from your total assets. In other words, net worth is everything you own minus everything you owe.

Total assets - total liabilities = net worth

Net worth is different to working capital. Net worth measures all your assets minus all your liabilities. Working capital only measures your current assets minus your current liabilities.

Fixed assets have low liquidity – difficult to turn to cash. This includes vehicles and property. Current assets have high liquidity – meaning they are easy to turn to cash. This includes accounts receivables and inventory.

Fixed liabilities are long term debts, such as mortgages and long term loans. Current liabilities are short term debts like accounts payable, payroll and unpaid taxes.

 

Related terms:
How to calculate net profit margin
What is net profit?
How to calculate gross profit
What are fixed assets?

Related Xero feature: 
Manage your fixed assets with easy-to-use accounting software

Related Small Business Guide: 
Track small business cash flow without spreadsheets

Accounting Terms

Accounting terms and how-tos for beginners. Let us walk you through all the basics that you need know.

How can I calculate my net worth?

Net worth is the monetary value of your business. To calculate your net worth, subtract your total liabilities from your total assets. In other words, net worth is everything you own minus everything you owe.

Total assets - total liabilities = net worth

Net worth is different to working capital. Net worth measures all your assets minus all your liabilities. Working capital only measures your current assets minus your current liabilities.

Fixed assets have low liquidity – difficult to turn to cash. This includes vehicles and property. Current assets have high liquidity – meaning they are easy to turn to cash. This includes accounts receivables and inventory.

Fixed liabilities are long term debts, such as mortgages and long term loans. Current liabilities are short term debts like accounts payable, payroll and unpaid taxes.

 

Related terms:
How to calculate net profit margin
What is net profit?
How to calculate gross profit
What are fixed assets?

Related Xero feature: 
Manage your fixed assets with easy-to-use accounting software

Related Small Business Guide: 
Track small business cash flow without spreadsheets

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