Consolidated Tangible Net Worth Calculator

The Consolidated Tangible Net Worth Calculator computes the tangible net worth of a group of companies by considering the total assets, liabilities, and intangible assets of the parent company and its subsidiaries. It adjusts for non-controlling interests and eliminates intercompany balances to provide an accurate representation of the group’s financial strength. This tool is essential for financial reporting, credit analysis, and investment decision-making.

Formula of Consolidated Tangible Net Worth Calculator

Step 1: Define Tangible Net Worth (TNW)

Tangible Net Worth represents a company’s net assets excluding intangible assets such as goodwill, patents, and trademarks. The formula is:
Tangible Net Worth = Total Assets – Total Liabilities – Intangible Assets

Step 2: Define Consolidated Tangible Net Worth Formula

For a consolidated group, the formula is:
Consolidated Tangible Net Worth = Consolidated Total Assets – Consolidated Total Liabilities – Consolidated Intangible Assets – Non-Controlling Interest

Where:

• Consolidated Total Assets = Total assets of the parent and subsidiaries, excluding intercompany assets.
• Consolidated Total Liabilities = Total liabilities of the parent and subsidiaries, excluding intercompany liabilities.
• Consolidated Intangible Assets = Intangible assets of the parent and subsidiaries.
• Non-Controlling Interest = Share of net assets attributable to minority shareholders in subsidiaries.

Step 3: Gather Required Data

• Parent Assets and Liabilities: Obtain from the parent company’s financial statements.
• Subsidiaries’ Assets and Liabilities: Aggregate the assets and liabilities from all subsidiaries.
• Intangible Assets: Sum up intangible assets from the parent and subsidiaries.
• Intercompany Balances: Identify and eliminate intercompany assets and liabilities.
• Non-Controlling Interest: Determine the proportion of net assets belonging to minority shareholders.

Step 4: Eliminate Intercompany Balances

Adjust for intercompany transactions to avoid double-counting:

• Consolidated Total Assets = Parent Assets + Subsidiaries’ Assets – Intercompany Assets
• Consolidated Total Liabilities = Parent Liabilities + Subsidiaries’ Liabilities – Intercompany Liabilities

Step 5: Calculate Consolidated Tangible Net Worth

Substitute the consolidated totals into the formula:
Consolidated Tangible Net Worth = (Consolidated Total Assets – Consolidated Total Liabilities – Consolidated Intangible Assets) – Non-Controlling Interest

Table of General Terms and Values

Example of Consolidated Tangible Net Worth Calculator

Problem

A parent company has assets of $8,000,000, liabilities of $5,000,000, and intangible assets of $1,500,000. Its subsidiary has assets of $4,000,000, liabilities of $2,000,000, and intangible assets of $500,000. Intercompany transactions include $1,000,000 in intercompany assets and $500,000 in intercompany liabilities. Non-controlling interests total $700,000. Calculate the consolidated tangible net worth.

Solution

1. Calculate consolidated total assets:
   Consolidated Total Assets = (8,000,000 + 4,000,000) – 1,000,000 = $11,000,000
2. Calculate consolidated total liabilities:
   Consolidated Total Liabilities = (5,000,000 + 2,000,000) – 500,000 = $6,500,000
3. Calculate consolidated intangible assets:
   Consolidated Intangible Assets = 1,500,000 + 500,000 = $2,000,000
4. Calculate consolidated tangible net worth:
   Consolidated Tangible Net Worth = (11,000,000 – 6,500,000 – 2,000,000) – 700,000 = $1,800,000

Result

The consolidated tangible net worth is $1,800,000.

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