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Net Assets

Updated on March 10, 2023

Net Assets are the value of a company’s assets after paying off its liabilities. Net assets are arrived at, by subtracting what a company ‘owns’ from what it ‘owes’ to others.
The total amount of net assets is exactly the same as the stockholders’ equity of a business. In the case of individuals, net assets represent their personal ‘net worth’.

What are the features of Net Assets?

Some features of Net Assets are:
1. Assets for a company can be short-term as well as long-term.
2. Short-term assets can include cash, cash equivalents or accounts receivable. Long-term assets include buildings, furniture, software etc.
3. Net assets reflect the financial health of a company.

How to estimate Net Assets ?

The formula to calculate net assets is simple:

Net Assets = Total Assets(A) – Total liabilities(L)
[(Total Fixed Assets + Total Current Assets) – (Total Current Liabilities + Total Long Term Liabilities)].
This gives the fund’s total asset structure after all expenses.