Which term describes the difference between your assets and your liabilities?

The term that describes the difference between your assets and your liabilities is net worth. This concept represents an individual’s or organization’s financial position at a specific point in time. By subtracting liabilities (what you owe) from assets (what you own), you arrive at the net worth, which is a key indicator of overall financial health. This figure is essential for evaluating personal finances, business health, and for making informed financial decisions.

In financial analysis, net worth provides valuable insights. It can be used to check if you are likely to meet debts, invest in opportunities, or make significant purchases. Maintaining or increasing net worth is often a priority for individuals and businesses aiming for long-term financial stability and growth.