Net Worth can be defined as:

Question

BlackTom AI · Accepted Answer

To begin untangling the concept, we analyze what 'Net Worth' represents in financial terms.
Option a: Sales Revenue. This is the total amount earned from selling goods or services before expenses, not the owner's overall financial position. Net worth is not about income flow, but about a stock at a point in time, so this is not correct.
Option b: Liabilities. Liabilities are obligations or debts owed to others. They are a component of net worth (net worth = assets minus liabilities) but by themselves they do not define net worth. Therefore this choice is incomplete and misleading as a definition.
Option c: Wealth. Wealth captures the notion of the total value of what one owns after liabilities are considered, i.e., net worth. In many contexts, wealth is used interchangeably with the concept of net worth as the residual value after obligations are subtracted from assets. This aligns with the standard definition.
Option d: Net Income. Net income reflects the profitability over a period (revenue minus expenses), not the overall value of an entity at a moment in time. It does not define net worth, so this option is incorrect.
In summary, the correct framing is that net worth corresponds to the accumulated wealth after accounting for liabilities, which matches option c. The other options describe separate financial measures (revenue, liabilities alone, and income) that do not by themselves define net worth.

Net Worth can be defined as:

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Net Worth can be defined as:

Net Worth can be defined as:

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