What is Tangible Net Worth?
Tangible net worth is a calculation that can apply to both individuals and businesses. For individuals, the formula is fairly easy to calculate. Your tangible net worth is the sum of all things you own that are tangible, such as a cash balance in your bank account, your home, your cars or other vehicles, and anything else that could fetch money should you be unable to pay your debts. Usually tangible net worth, especially when you’re applying for loans or credit, doesn’t include the small stuff. It also subtracts any debts or liabilities from what you owe. If you are paying off a car, for instance, the debt remaining would be subtracted from the value of the car, and only your equity in the vehicle would be part of tangible net worth. In businesses, tangible net worth is also evaluated by things like cash, inventory in the business, and both small and large property of the business. From this amount is subtracted liabilities and intangible property. There are a long list of things that
