FIXED ASSETS (NET) / NET WORTH Definition

Bookmark and Share

FIXED ASSETS (NET) / NET WORTH measures liquidity by comparing "fixed" assets with "fixed" capital. A lower ratio indicates proportionately smaller investment and a better "cushion" for creditors in case of liquidation. This may be important if the fixed assets are not easily used in other businesses. The presence of substantial leased fixed assets (not shown on the balance sheet) may deceptively lower this ratio. Therefore smaller is better, i.e., greater than .75 (75%) should merit caution.

Learn new Accounting Terms

CRUT is an acronym for Charitable Remainder Unitrust.

PROFITABILITY RATIOS are measures of performance showing how much the firm is earning compared to its sales, assets or equity.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.