Non-Current Assets to Net Worth

Non-Current Assets to Net Worth ratio provides a measure of a company's investment in low-liquid non-current assets. It is less dependent on industry (structure of company assets) than debt ratio or debt-to-equity ratio.

Non-Current Assets to Net Worth

Non-Current Assets to Net Worth ratio provides a measure of a company's investment in low-liquid non-current assets.

The ratio is important for comparative analysis because it is less dependent on industry (structure of company assets) than debt ratio or debt-to-equity ratio.

 


Non-Current Assets to Net Worth Formula

The formula for Non-Current Assets to Net Worth is:



Interpretation of Non-current Assets to Net Worth

An acceptable Non-Current Asset to Net Worth ratio is about 1-1.25 or lower, but it is dependent on the industry.  For capital-intensive industries (i.e. companies with a high share of non-current assets against current assets) the ratio may be higher.


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