Net Assets

Business, Legal & Accounting Glossary

Definition: Net Assets

Quick Summary of Net Assets

Assets minus liabilities (equals ownership interest).

Full Definition of Net Assets

Net assets (also known as owners equity, shareholders equity, or net worth) is the total assets minus the total liabilities of a company or individual. Thus if total assets is $100,000 and total liabilities is $80,000, net assets is $20,000. Net assets represent the portion of assets financed by owners capital, as opposed to creditors capital. On the balance sheet, net assets comprise both capital stock and additional paid-in capital, which represent monies paid into the company for its shares. Net assets also include retained earnings, the portion of accumulated net income not paid out as dividends. Companies want to ensure their net assets is sufficient to meet their current obligations, even when business turns sour. On the other hand, net assets can also be too high. When a company avoids debt entirely – i.e., its net assets equals its total assets — it may be foregoing profitable business opportunities that could be financed through bonds. Finally, note that net assets are used in a similar fashion (ie, total assets less liabilities) to describe the net worth of a mutual fund.

Synonyms For Net Assets

net worth, net asset, net wealth, equity, amount of net asset

Cite Term

To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
Modern Language Association (MLA):
Net Assets. Payroll & Accounting Heaven Ltd. September 28, 2021
Chicago Manual of Style (CMS):
Net Assets. Payroll & Accounting Heaven Ltd. (accessed: September 28, 2021).
American Psychological Association (APA):
Net Assets. Retrieved September 28, 2021, from website:

Definition Sources

Definitions for Net Assets are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 7th February, 2020 | 11 Views.