Written by the Fiveable Content Team • Last updated September 2025
Written by the Fiveable Content Team • Last updated September 2025
Definition
Net assets represent the difference between a company's total assets and its total liabilities. It indicates the equity value that would be left for shareholders if all assets were liquidated and all debts paid off.
5 Must Know Facts For Your Next Test
Net assets are calculated as Total Assets minus Total Liabilities.
They are synonymous with shareholders' equity in the balance sheet.
Positive net assets indicate a financially healthy company, while negative net assets suggest financial trouble.
Net assets can fluctuate based on changes in asset values or liabilities over time.
They provide insight into a company's financial position and sustainability.
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Related terms
Total Assets: The sum of all current and non-current resources owned by a company.
Total Liabilities: The aggregate of all current and long-term debts and obligations owed by a company.
Shareholders' Equity: The residual interest in the assets of the entity after deducting liabilities, also known as owners' equity or stockholders' equity.