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Adjusted Total Assets Formula:
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Adjusted Total Assets represents the value of a company's total assets after accounting for specific adjustments. These adjustments might include intangible assets, non-operating assets, or other items that need to be excluded for analytical purposes.
The calculator uses the simple formula:
Where:
Explanation: This calculation provides a more accurate picture of a company's operational assets by removing non-core or non-operating assets from the total.
Details: Adjusted total assets is important for financial analysis, loan covenants, and valuation purposes. It helps analysts and investors understand the true asset base available for generating operating income.
Tips: Enter total assets and adjustments in the same currency. Both values must be positive numbers. The calculator will automatically compute the adjusted total assets.
Q1: What types of adjustments are typically made?
A: Common adjustments include removing intangible assets, non-operating assets, or assets that are not available for general business operations.
Q2: Why would you adjust total assets?
A: Adjustments are made to get a clearer picture of the assets actually used in operations, or to compare companies with different asset structures.
Q3: Is adjusted total assets used in financial ratios?
A: Yes, some analysts use adjusted total assets in ratios like return on assets (ROA) to get a more accurate measure of operational efficiency.
Q4: How does this differ from net assets?
A: Net assets subtracts total liabilities, while adjusted total assets only makes specific adjustments to the asset side of the balance sheet.
Q5: Should all companies adjust their total assets?
A: Not all companies need adjustments. It depends on the purpose of analysis and the nature of the company's assets.