alleryStart learning →What is the other name for the total amount of investment in a firm minus any liabilities?
AGross profit margin
BNet working capital
CRetained earnings
DOwners net worth
Answer & Solution
Correct answer: D. Owners net worth
1. Owners' equity is the total amount of investment in the firm minus any liabilities.
2. Net worth is simply another name for that same figure.
3. Retained earnings are only one part of owners' equity, the profits left over since the firm began, so they are narrower than the whole.
4. Net working capital compares current assets with current liabilities, and gross profit margin compares profit with sales, so neither measures ownership.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 14 "Using Financial Information and Accounting", section Key Terms_
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