Net Investment in Fixed Assets

This calculation subtracts any existing long-term debt related to fixed assets (e.g., vehicle loan, mortgage, leasehold improvement loan, etc.) from the value of fixed assets. The value of fixed assets (or net fixed assets) is the cost less accumulated depreciation. The net investment (or equity) in fixed assets is essentially a mini fixed assets balance sheet. The total value of fixed assets less fixed asset-related liabilities = net investment (equity) in fixed assets.

                  Net Fixed Assets – Fixed Asset-related Long-Term Debt

Signal:  This will usually be a positive number; a negative number would mean you owe more than the fixed assets are worth.

Calculation:  This amount may not mean much by itself but will be useful to know in terms of overall net assets composition.

Caveat:  None.