[manjunathdoddaiah]

What is the meaning of tangible networth

[Curlyben]

Broadly, how much cash you can lay your hands on.

[morgaine300]

I'm not sure that's what it means. I'm not familiar with the term "tangible net worth." However, how easily something can be converted to cash is liquid. Tangible is something with a physical substance, i.e. not investments and that sort of thing.

At least in accounting - other subjects can define things differently. It may be I'm not familiar with the term cause another subject area uses it. But this is, after all, the accounting forum.

[ArcSine]

It's a variant on the customary net worth equation (Assets less Liabilities), except with all intangible assets excluded from Assets in the computation.

It's roughly analogous to the concept of making "current ratio" more conservative by pulling inventory out of current assets, and renaming it "quick" or "acid test" ratio.

Cheers, all!

[morgaine300]

Does that mean literally the category "intangibles" (although that's more an accounting concept than finance), or literally anything that's intangible, including investments, receivables, prepaids, etc.

[ArcSine]

It's probably best to think of it as a general concept which gets specifically defined on a case-by-case basis. A banker might want to see a company's TNW in advance of approving a new credit line, and he'd further define it to mean the company's book equity, after pulling out "that patent you're carrying on your balance sheet as an asset."

A venture capitalist might run a TNW check on every potential investee company, and he/she would likely have his or her own idea of what assets are to be included and excluded in coming up with a number that's meaningful for his or her investment purposes.

So there's no carved-in-stone definition of what's 'intangible' or not for TNW... it'll be defined according to the need at hand.