question about net worth of a company

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Yan Zhang

March 27, 2020 01:20

Per AHPP, net worth is fixed assets + assets expensed for tax purposes + accrued assets + other assets - liabilities. 

I had a question from WEARE to calculate the company net worth but that calculation does not include account receivable. Should account receivable be included in the accured asset? AHPP does not have a straightforward answer about that. If account receivable is included in the accured asset, then WEARE calculation should be wrong. 

Please let me know.

Thanks,

 

 

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  Haytham Abdelrahman Abdelall, LEED AP, WELL AP. March 30, 2020 04:52

  Account receivable and WIP are part from Current Assets, could you please share the WEARE question.

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  Yan Zhang March 30, 2020 20:08

  Hi Haytham, here is the screenshot of WEARE question. Since account receivable is part of current assets, the right answer should be what I chose: $212,000($250K plus $12k minus $50k). Please let me know.

   

  Thanks, 

   

  

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  Haytham Abdelrahman Abdelall, LEED AP, WELL AP. March 31, 2020 16:15

  Hi Yan, account receivable is part of Total Assets that's why it should be out of calculations. If the question mentioned specific assets (not total) then you can add account receivable to calculation of total assets.

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  Yan Zhang March 31, 2020 16:39

  But, per AHPP, total asset = total current asset + total fixed asset. And account receivable is included in the total current asset. Therefore, when we calculate total asset, we should take account receivable into consideration.

   

  

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  Haytham Abdelrahman Abdelall, LEED AP, WELL AP. March 31, 2020 17:06

  Correct, but the information provided in the question was " Total Assets" which as per AHPP includes account receivable, so no need to double counting it.

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  Yan Zhang March 31, 2020 17:16

  Ohhhhhh, now I understand it. The total asset has account receivable included. That is why. Thank you Haytham.

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  Haytham Abdelrahman Abdelall, LEED AP, WELL AP. March 31, 2020 17:19

  You're welcome, I encourage you to go through Hyperfine course for financial management, it's very to understand all these from AHPP. Desk Crits also has a good summary.

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  Yan Zhang March 31, 2020 17:45

  Thanks, me and my study buddy has finished Hyperfine financial part. Hyperfine is very helpful. 

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  William Tucker April 01, 2020 01:11

  Glad you asked about this Yan. Now it makes a lot more sense!

   

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  Yan Zhang April 01, 2020 02:21

  HAHA, yeah, I was confused. Now I understand the reason.

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