The financial condition of a business is the most important thing to any business owner; he/she should know the ways to determine the financial health of his/her business in order to make it flourish. It is only by rectifying and improving the weak areas of the body that you can get optimal health; it is just the same with the health of your business as well.
Steve Sorensen Net Worth helps in understanding this financial health of a company by giving an analysis of the net worth of several giant companies like Google, Face book, etc. He is a blogger from Iowa who has always been fascinated by the way big names in the corporate world have grown in size and finances. He is completely awed by the kind of contribution these great companies like Apple and Microsoft have made towards the modern style of living.
Assets and liabilities are the determinants of net worth of any organization or even individual. Net worth is not a term that is particularly associated with business; even individuals can calculate their net worth based on their assets and liabilities. It is only after a deduction of the total liabilities is made from the total assets that the net worth of any business or individual can be determined.
Assets, by definition are the things that any organization or individual owns and/or controls, they have certain expected future that benefits the future of a business. Assets include all such things as cash, jewelry, real estate property, car, homes, etc., Steve Sorensen Net Worth bases all his analysis on the assets that a company owns whether they are long term or short term in nature. Those assets that can be converted into cash within a term of 12 months is termed as current or short term asset; while those that cannot be converted into cash within that stipulated time is termed as long term asset.
Liabilities, on the other hand, are the debts that one owns; they too can be long term or short term. The mortgages, taxes due on payrolls, the notes payable are all considered within this category. When the liability is expected to be paid off within 12 months time it is known s short term liability and when there is very little chance of this, extending the payment of the liability to more than 12 months, it is known as the long term liability.
It is a detailed study of both these determinants that the net worth can be easily calculated; depending on the organization, it can be defined as different types. The profit organizations report their net worth with the help of equity funds. The net worth of the proprietorship of an individual or a partnership is known as the “Owners Equity”; contrarily, a corporation considers two types of equity accounts –Capital Stock and Retained Earnings.
The non-profit organizations term the difference of their assets and liabilities that is the net worth as the “Fund Balance”. Whatever, the term of the net worth may be what you require in order to determine it is the balance sheet of your enterprise.