A company's net worth is equal to what?

A company's net worth is fundamentally represented by the concept of owner's equity, which is an essential part of financial accounting. Owner's equity reflects the residual interest in the assets of the entity after deducting liabilities. In other words, it shows what the owners of the company actually own once all debts have been accounted for.

When analyzing a company's balance sheet, net worth can also be understood as the amount available to the owners if the business were to liquidate its assets and pay off its obligations. This measure is crucial for assessing the financial health and stability of a business, as it provides insight into the value attributable to the owners based on the company's net economic position.

While assets minus liabilities does mathematically yield owner's equity, the term "net worth" is more commonly associated with and defined as owner's equity in the context of business finances. Therefore, recognizing owner's equity as the direct representation of a company's net worth is accurate and aligns with standard business definitions.