Calculating net worth is a fundamental financial analysis technique used to determine the value of an individual’s or organization’s assets and liabilities.
Net worth is the difference between the total value of one’s assets and the total value of their liabilities. For instance, if an individual has $100,000 in assets (e.g., cash, investments, real estate) and $20,000 in liabilities (e.g., mortgage, credit card debt), their net worth would be $80,000.