In the world of business, the net worth of a corporate enterprise is the single most important determinant that measures the wealth of its business. This is the reason which why it is imperative for its investors, creditors and other stakeholders to know overall value of the company. The net worth is the amount by which the financial assets of a company exceed its liabilities and provides a snapshot of the financial situation of the business at a particular point of time. This figure indicates the performance of the business enterprise during the financial year and is a convenient wakeup call when its financial performance during a particular accounting year is completely off the track.
Steve Sorensen, is a reputed financial consultant cum investment strategist from USA who along with his team of financial specialists are the first choice among corporate enterprises throughout America when it comes to enhance their business wealth. He is the brainchild behind the success stories of many businesses in the corporate world including a number of prominent Fortune 500 companies and has been a catalyst in increasing their net worth in the financial market. The Steve Sorensen Networth team of financial specialists emphasize that the net worth of a corporate enterprise is important for the following reasons:
- Net worth is the most accurate measure of wealth
For most people wealth implies that amount they have left after paying liabilities in the form of expenses and bills. In the business world, the net worth of a company is also the difference between total financial assets and financial liabilities. For both corporate enterprise and individuals, there is no other appropriate measure of wealth.
- Tracking financial progress
For corporate enterprise, the net worth is a measure of the financial progress of its business from one accounting period to another. A growing net worth is also a sign that a company is gaining a foothold in the market in which it is operating its business activities and a step closer to gaining the competitive edge in that market.
- Moving the financial focus beyond income
Unlike other determinants of wealth and prosperity, the net worth of a company also takes into consideration accounting expenses, taxes and other specifics besides profits and income.
- Net worth is important when applying for loans
As the net worth is an ideal measure of the overall financial strength of a corporate enterprise during the accounting year, banks and financial institutions use this determinant as a convenient indicator to decide whether to sanction a loan application.
The Steve Sorensen Networth team of financial specialists state that it is imperative for the top management of a corporate enterprise to know the net worth of their business as it helps them to evaluate the financial health of their business and plan for the future. By being aware of where they stand financially can help these executives be more mindful of the business activities and are in a better position to take prudent financial decisions to achieve their financial goals.