Net Assets = Assets − Liabilities
What the item represents
Net assets is one of the three sections of the balance sheet (assets, liabilities, and net assets), and it always equals total assets minus total liabilities. It is made up of items such as shareholder contributions (capital stock and additional paid-in capital) and accumulated earnings (retained earnings).
Points to watch when reading it
Net assets divided by shares outstanding gives book value per share (BPS), and net assets as a proportion of total assets gives the equity ratio — both are commonly used indicators for assessing a company's financial health.