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Net worth for a company is its total assets minus total liabilities. This is an important determinant of the value of a company, considering it is composed primarily of all the money that has been invested since its inception, as well as the retained earnings for the duration of its operation. Net worth can be used to determine creditworthiness because it gives a snapshot of the company’s investment history. This is also called as owner’s equity, shareholders’ equity, or net assets.
In case of an individual, net wroth is the value of a person’s assets, including cash, minus all liabilities – the amount by which the individual’s assets exceed their liabilities is considered the net worth of that person.