1) Assets & Liabilities in a personal context
Our assets are anything we own that can be converted into cash, such as a home, a checking account
balance, contents of home, automobile, house, instruments, stocks etc.
Liabilities are sums owed to others, such as our mortgage, student loans, unpaid accounts, bank loan,
auto loan, income tax, credit card debt etc.
Assets & Liabilities in business context
A company’s assets are what it owns, and its liabilities are what it owes. Both are listed on a company’s
balance sheet, which is a financial statement that shows the financial situation of the company. Equity,
or an owner’s net worth, is equal to assets minus liabilities.
2) Net-worth in personal context
Our personal net worth is the sum of our assets (everything we own) and liabilities (everything we owe).
This can be a positive or negative number, and it is a good indicator of our financial situation at any
given time. (Net Worth= Assets-Liabilities)
Net-worth in business context
The value of a company is defined as its net worth. It is an important factor of a company’s balance
sheet and is sometimes referred to as “owner’s equity.” (Owner’s Equity= Assets-Liabilities)
3) Surplus(Deficit) in personal context
A surplus is the amount of an asset or resource that exceeds the amount actively used. A surplus can
refer to a variety of items, such as income, profits, capital, and goods. On the other hand, a deficit