Net worth Clarification

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thiyaga rajan (Querist)
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06 July 2021 Is Good will of a company is considered in calculating the net worth of a company?

How a Good will is calculated?

If a company's net worth is 1 crore, how banks give loan worth of 10 crore?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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06 July 2021 Goodwill of a company is not considered in calculating the tangible net worth of a company.

Net Worth = Assets-Liabilities.

Besides networth the bank will consider growth opportunities of the company.
If the loan is for a new factory it will be pledged against the loan.

thiyaga rajan

thiyaga rajan (Querist)
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06 July 2021 Thanks a lot sir

So, does the bank consider the brand value and the future of company growth etc, as per current market scenario ?

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 July 2021 Yes, it will consider.

thiyaga rajan

thiyaga rajan (Querist)
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07 July 2021 Thanks for your reply sir

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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