Net worth can be understood as the difference between assets and liabilities of a business. If assets are more than liabilities, net worth is said to be positive and if liabilities exceed the assets, net worth will be negative. Net worth in business is used for assessing the financial health of an organisation. Any company which has more liabilities than assets at a given time, will have to reconsider its business operations or strategy and make changes, if it’s networth stays negative for a long period.
