Assets, Liabilities, and Net Worth

Front

What are assets?

Back

Assets are resources owned by an individual or entity that have economic value and can provide future benefits.

Front

What are liabilities?

Back

Liabilities are obligations or debts that an individual or entity owes to others, which must be settled in the future.

Front

What is net worth?

Back

Net worth is the difference between an individual's total assets and total liabilities, representing the value of what they own minus what they owe.

Front

How do you calculate net worth?

Back

Net worth = Total Assets - Total Liabilities.

Front

What does zero net worth mean?

Back

Zero net worth means that an individual's assets are equal to their liabilities.

Front

What is positive net worth?

Back

Positive net worth occurs when an individual's assets are greater than their liabilities.

Front

What is negative net worth?

Back

Negative net worth occurs when an individual's liabilities exceed their assets.

Front

Give examples of assets.

Back

Examples of assets include cash, real estate, stocks, and personal property.

Front

Give examples of liabilities.

Back

Examples of liabilities include loans, credit card debt, and mortgages.

Front

What does it mean if someone has a positive net worth?

Back

It means that their assets exceed their liabilities, indicating financial stability.