What is a net assets equation?

It’s the owners’ claim to the assets of the company. The term net assets comes from the accounting equation. As you can see, the assets of a company are equal to the liabilities and owners’ equity. If you move the liabilities over to the assets side of the accounting equation, you will get the net assets equation.

What are net assets?

(Formula, Definition, FAQs, and More) Net assets are the total assets of a business, minus liabilities. The value of net assets is used for comparison to other companies in the same industry, or to compare it to its own performance over time. Net assets can also be used to determine whether a company is profitable or bankrupt.

What is a net asset on a balance sheet?

What are Net Assets? The net asset on the balance sheet is defined as the amount your total assets exceed your total liabilities and is calculated by simply adding what you own (assets) and subtracting it from whatever you owe (liabilities). It is commonly known as net worth (NW).