Net assets

Net assets are sometimes the same as net worth, or shareholders' equity - assets minus liabilities. The term net assets is commonly used with charities or not for profit entities. Although these entities don't make money, it is important to maintain reasonable reserves to help future growth.

In "Return On Net Assets" (RONA) it's often fixed assets plus net working capital (current assets minus current liabilities), which may be slightly less than total assets.

If net assets are negative, then an entity is balance sheet insolvent.

External links

• Return On Net Assets - RONA
• Charity Navigator Glossary