What is Net Worth?

Net worth is the total value of a person or entity’s assets, minus all of their outstanding liabilities. Net worth is most often used in personal finance, with the simple calculation of Net Worth = Assets - Liabilities.

In the business context, net worth is also known as book value or shareholder’s equity, and those with rising book value mean they are generating more revenue and obtaining property more quickly than they’re accumulating debt. A rising market value does not necessarily correlate to a rising net worth, as the market may bid up a company’s market capitalization absent profit growth.