University:
Montclair State University
Course:
INBS 250 | Introduction To International Business
Academic year:

2021
Views:

450

Pages:

1
Author:

Carissa Thomas

Learning Journal Answer the following in approximately 250 words: a. How is net worth calculated? b. What is the meaning of the statement that your net worth is the equity you have in your own life? A Net worth can be defined as every item of economic value that one possesses(Assets) minus every item of economic value that one owes(liabilities)in the form of debts(Trent Hamm. July 22 2020).Net worth can equally be expressed as the balance left after subtracting your debts from assets. When your assets is higher than your liabilities , your net worth will be positive but if liabilities supersedes assets , your net worth will be negative (Jean Folger . May 17 2020).Net worth is a quantifier of ones financial stability (financial health). There are three simple steps to consider, when calculating net worth. -listing all assets together with their estimated worth or values .For instance, car , any bond in your possession , your house , total stock value,all your account balances.Add all of them together to have general value of all your assets .(Trent Hamm. Jul 22 2020) -Listing down every debts you have .This includes loans from home,from car ,students and personal loans and credit carte card balances.Make a sum total of all your debts. -Take the total amount of debt and remove it (minus) from total amount of assets .The balance will give you your net worth. NET WORTH =TOTAL ASSETS -TOTAL DEBTS B This statement simply means that , your net worth being the quantifier or the qualifier of your financial stability is equal to your equity.Equity is that thing that can never be enough for .When we talk of equity , we talk of a balance .Every individual in a working world aims to acquire a certain financial balance ,a certain comfort in our homes. Equity is something we will always ask for more. In our person sphere of life , our equity becomes stronger we are able to buy cars ,homes and many other housing supplements. An a clear picture of one's net worth through net worth statement is equally known as equity.That is the balance obtained from the difference between assets and liability is known as equity.