Effective net worth

EFFECTIVE NET WORTH - Net worth plus subordinated debt.
EFFECTIVE PAR - The par value for preferred stock that would ordinarily correspond to a given dividend ...

effective net worth
net worth plus subordinated debt, as viewed by senior creditors. In small business banking, loans payable to principals are commonly subordinated to bank loans.

Effective Net Worth
The shareholders' equity of a corporation, plus subordinated debt. Effective net worth is particularly useful in closely held corporations, since executive officers in these entities are also its owners.

effective net worth The value of shareholder's equity in a firm plus subordinated debt (debentures... effective par The par value for preferred stock that would ordinarily correspond to a given dividend rate.

Used with SAT performance measures, the amount equal to the net earned spread, or margin of income, on assets in excess of financing costs for a given interest rate and prepayment rate scenario.
Effective net worth ...

See also: Subordinated debt, Subordinated, Compensation, Expense, Fraud