What are net assets and why is a positive net asset balance good?
Simply stated, net assets are the excess or deficiency of assets over liabilities.
To ensure long-term organizational and operating stability, it is generally wise to have a significant net assets balance.
Building a net assets balance occurs by operating with revenues in excess of expenses.
To determine the adequacy or inadequacy of the net asset balance, one should review how this balance
is broken down between unrestricted, temporarily restricted, or permanently restricted net assets.
Another key consideration is the amount of net property, plant, and equipment included in the unrestricted net assets number.