# How to Calculate Total Assets

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Total assets are the total resources, both physical and monetary, that an individual or business owns. Total personal assets are calculated based on the fair market value of the assets and are used to determine net personal worth. Total business assets are also the sum of company resources, but the assets are valued differently depending on their nature.

## Total Personal Assets

Total personal assets is the fair market value of all of your valuables. The most significant assets for most individuals are homes, cars, furniture, art, checking, savings, retirement and investment accounts. Include any real estate or vehicles you've purchased even if you don't own them outright. If you own other significant assets, like coins or other collectors items, include those as well. Calculate and sum the fair market value of all assets. The fair market value of an asset is what you could sell it for today in a normal market transaction. For physical assets, use valuation sources like Zillow.com, Ebay and Kelly Blue Book to estimate current value.

## Total Personal Assets in Practice

Individuals typically identify total personal assets to calculate personal net worth. Personal net worth is total personal assets less any liabilities. The most common personal liabilities are student debt, personal loans, credit card balances, auto loans and mortgages. Sum total liabilities based on the current face value of the liability. For example, if you have \$5,000 left on your car loan, value the liability at \$5,000. The difference between your total assets and total liabilities is your net worth.

The concept of total business assets is similar to that of total personal assets, but the most common assets and valuation methods differ. For businesses, the most common assets include real estate, buildings, equipment, furniture, inventory, supplies, cash, savings and investments. Generally accepted accounting principles require businesses to value some of these assets at fair market value and others at cost. Liquid assets, like cash, savings and investments that can be readily sold, are valued at fair market value. Physical assets like furniture, equipment and buildings are valued at cost less accumulated depreciation. Inventory is valued at the lower of cost or fair market value. Land is always valued at historical cost.

## Total Business Assets in Practice

Managers, investors and creditors evaluate companies using a variety of ratios and figures that include total assets. The most fundamental value of a company is total assets minus total liabilities. This is referred to as net assets or total equity and it represents the resources available to the owners unencumbered by debt and liabilities. Total assets are also used in various financial ratios. For example, the asset turnover ratio is an indicator of how much revenue a company is deriving from assets. It's calculated by dividing revenue by average total assets during the period. The higher the ratio, the more effectively the company is earning revenue from assets.

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