How to Compute Net Worth on a Financial Statement

Net worth is the sum total of a person's (or couple's) assets after subtracting their liabilities. It is a measure of the level of their debt, and it is important in many financial transactions including applications for new loans.

A net worth statement is part of the Uniform Residential Loan Application form provided to lenders by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddy Mac). It serves as a good example of a net worth statement.

Instructions

1

In the Assets and Liabilities section of the financial statement, list all your holdings and debts. Your assets go on the left side.

List and enter the balances of any accounts you have with banks, savings and loans, and credit unions. Enter the account numbers and the current balances.

2

List all the stocks and bonds you hold and enter their current value.

3

For any life insurance policies that have a cash value, enter the policy information and the value.

4

Subtotal the above items. These are your liquid assets.

5

List any real estate you own, including your home. Estimate the value of the real property without regard to any mortgages owed.

6

If you have a vested interest in a retirement fund, enter that amount.

7

If there are businesses in which you have a financial interest, enter their value. You may also need to provide an accompanying financial statement to justifying the values you enter.

8

List all the cars and other vehicles you own by make and year and enter their current market value.

9

Itemize significant personal property you own including clothing, jewelry, tools, sports equipment, etc. Provide an estimate of the total resale value of these items.

10

Add the liquid asset subtotal above with the value of the other assets you have listed. This is the estimate of your total assets.

11

Your liabilities go on the right side of the form. This will be a complete list of all your creditors with names and addresses and account numbers and the amount of your debt they own. Include real estate loans, car loans, personal loans, and credit cards. Enter the unpaid balances as well as the monthly payments required for each.

12

Enter the amount of any other liabilities including stock pledges.

13

List and describe any court ordered payments you are responsible for including alimony and child support and mandatory job related expenses like child care and union dues.

14

Add all your liabilities together and sum your monthly payments for these obligations.

15

Subtract your total liabilities from your total assets. The result is your net worth.