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Answer Posted / shashank kadu
The net worth is the Total equity of the stockholders held
with the company. It consists of the Total paid up capital
(Equity + Preference) + Reserves & Surplus. In other words,
it is also calculated as Total Assets - External
Liabilities(excluding capital and reserves). The term
"external liabilities" means the liabilities of the company
towards the external authorities or parties to the company.
The stockholders, in this case are the internal authorities
and are not included in this term.
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