Editing Net worth (section)

===Companies===
Net worth in business is also referred to as [[Equity (finance)|equity]]. It is generally based on the value of all assets and liabilities at the [[market value|carrying value]] which is the value as expressed on the [[financial statements]]. To the extent items on the [[balance sheet]] do not express their true (market) value, the net worth will also be inaccurate. On reading the balance sheet, if the accumulated losses exceed the shareholder's equity, net worth becomes negative.

Net worth in this formulation does ''not'' express the [[market value]] of a firm; a firm may be worth more (or less) if sold as a [[going concern]], or indeed if the business closes down.

Net worth vs. debt is a significant aspect of business loans. Business owners are required to "trade on equity" in order to further increase their net worth.<ref>{{Cite journal|last=Hardy|first=C.O.|title=The Ration of Net Worth to Debt|journal=The University Journal of Business|year=1925|volume=4|issue=1|pages=38–46|doi=10.1086/506818|jstor=2354605}}</ref>