View Full Version : Bare with Me.........I'm a Rookie

07-21-2005, 12:07 PM
Hi everyone, my name is Bryan and i have a few questions.

But, dont think i am an idiot im just 16 8O , but i want to get a head start and learn some business terms.

First of all what is:
- gross income?
- cash flow?
- net worth?

I've been seeing it a lot on many sites but, the definitions are a bit vague for me, a simple example would be nice.

Thanks :lol:

08-20-2005, 09:04 AM
Hi mate,

Gross income = total income before you take anything like tax and raw materials costs off.

Cash Flow = how much money you have coming in and when versus how much money you have going out and when.

Not too sure about Net Worth but I imagine in means how much you (or the company or whatever) is worth taking into account how much you / it has + any other assets that you have.

Hope this helps a bit


11-25-2005, 10:20 PM
Net worth is how much money you have after you have paid out all expenses and taxes. It varies month to month. With large corporations, its usally done on an average, unless the corporation is about to be merged/taken over. Then its shown as month to month, and also what it is right before the deal is finished.

11-30-2005, 12:03 AM
Hey Bryan,

I'm a student as well. SO maybe I can level with you in terms of understanding.

Your gross income is how much you make before taxes. It is the figure people are looking for when they ask how much you gross a month.

Cash flow is crucial to companies, having ample cash on hand will ensure that creditors, employees, and others can be paid on time.

NET WORTH - The amount by which a company or individual's assets exceed their liabilities.

For a company, this is known as shareholder's (or owner's) equity and is determined by subtracting liabilities on the balance sheet from assets. For example, if a company has $45 million worth of liabilities and $65m worth of assets the company's net worth (shareholder's equity) would be $20m ($65m - $45m).

Alternatively, let's say an individual has only three assets, $100,000 worth of common stock, $30,000 worth of bonds and $40,000 worth of equity in their house. Conversely they have only one liability, $150,000 owing on their mortgage. The individual's net worth would be $20,000 ([$100,000 + $30,000 + $40,000] - [$150,000]).