Key Points

Net assets are the actual wealth owned by a company or individual.

The net assets are the net amount obtained by deducting all liabilities from all assets.

Investing in the stock market requires a focused analysis of the changes in net assets of the investment symbol.

Conceptual Understanding

Net assets are tangible assets that belong to oneself.

For individuals or companies, net assets are the value of all assets they own, minus all liabilities. This is the actual asset equity owned by individuals or company owners, which is owner's equity. Owner's equity = assets - liabilities.

For example, on a certain day, the total assets of Company A are a factory worth 1 million US dollars, a car worth 0.01 million US dollars, 10 sets of office supplies worth 1000 US dollars, and the total liabilities are a bank loan of 0.8 million US dollars. Therefore, the net assets of Company A are 0.211 million US dollars.

If the total assets of a company or individual are less than the total liability amount, then the net assets will be negative, so net assets can be positive or negative.

The significance of net assets

Analyzing net assets is an important way to understand how much wealth a person or company truly possesses. Only looking at assets and not considering liabilities may lead to misleading judgments. Therefore, in stock market investment, investors often need to focus on analyzing the net assets of investment symbols and combining their asset and liability changes to determine the future operation status of the investment symbols.