From ACT Wiki
Revision as of 14:48, 26 May 2020 by Doug Williamson (Add numerical example.)
Net assets are equal to Total assets LESS Total liabilities.
- Simple example
- Other assets are 70.
- Cash is 30.
- Total assets = Other assets + Cash = 70 + 30
- Total assets = 100
- Debt is (40)
- Other liabilities are (10)
- Total liabilities = Debt + Other liabilities = (40) + (10)
- Total liabilities = (50)
- Total assets - Total liabilities = 100 - (50)
- Net assets = 50
Net assets are also equal to the book value of equity, also known as shareholders' funds.