You can understand your or a company’s financial strength by calculating net worth. The net worth definition is pretty simple: it is the total value of assets subtracted from the total liabilities. Here, assets refer to cash in your bank accounts, properties and other assets (like cars or gold) that you own or investments that you have made. Liabilities refer to loans, taxes or anything else that you are obligated to pay.
If you have a positive net worth, it means your financial health is good and if your net worth is negative, it means that your obligations outweigh your assets, and you will need to work on improving your finances.
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