Question

These are Tommy's calculations for his net worth: Net Worth = $321 - $350 = -$29. What does the negative net worth mean?

Answer 1

Having a negative networth means Tommy's liabilities is greater than his assets.

Explanation:

Networth is an indicator of financial status. The combined monetary value of one's assests is his networth. Networth is calculated when the total of what you owe(liabilities) is subtracted from what you own(assets).

Assests are everything you own (both cash and properties), while liabilities can be debts or financial obligations.

In this case, Tommy's liabilities is $350 and his assests is $321, which means that Tommy is in debt.

Since his asset is smaller than his liability, Tummy now has a negative networth ($321 - $350 = -$29).

Answer 2

Tommy is in debt -$29

Explanation:

Tommy had $321 and he spent $350. His total net worth is $-29. This means he spent more then he had and now is in debt. He owes $29.