By determining a business's assets and liabilities, we can calculate its owners' equity, or net worth.
Assets
Everything a business owns is considered to be an asset. There are two main categories of assets to be aware of. Tangible assets include anything you can see, such as cash or real estate. Intangible assets include things that have value but aren't physical items and can be tougher to value. For example, if a business has a strong brand name, it can result in the ability to charge more than competitors for similar goods or services and therefore has some monetary value. Other types of intangible assets can include trademarks, patents, and industry knowledge, just to name a few.