This term refers to the total accumulated assets of an individual, minus their liabilities. It encompasses the value of all possessions, including real estate, investments, and other holdings. Calculating this figure provides a snapshot of an individual’s financial standing at a specific point in time. Understanding this concept is crucial for financial planning and analysis.
For instance, a business owner’s calculation might include the value of their company, personal properties, and stock portfolio, while subtracting any outstanding debts. Another example could be an artist whose worth might be derived from the value of their artwork, real estate holdings, and other investments, less any debts or loans.