Net worth is best described as:

• A. How much of the business you own
• B. How much cash on hand you have
• C. Total revenue
• D. The owner's claim on the business after liabilities

Answer: (D)

Net worth is the owner’s claim on the business after liabilities are paid. In other words, it’s the dollar value of what the owners actually own in the company at a given moment, calculated as assets minus liabilities.

This isn’t about how much cash you have right now—that’s liquidity. It isn’t total revenue, which is income earned over a period. It also isn’t simply “how much of the business you own,” which describes ownership stake; net worth translates that stake into a concrete dollar value representing the residual claim after debts are settled.

For example, if the business has assets of 500,000 and liabilities of 200,000, the net worth (owner’s equity) would be 300,000. That 300,000 is the owners’ claim on the business after all obligations are cleared.