How do I check a company net worth?

A company net worth (also called net assets or shareholders funds) is shown on the balance sheet in filed accounts at Companies House. Total assets minus total liabilities equals net worth. However, filed accounts can be 9 to 21 months old by the time you read them. RecoupIQ combines this with real-time signals for a current picture.

What does negative net worth mean?

Negative net worth means the company owes more than it owns. This is one of two insolvency tests (the balance sheet test). A company with negative net worth is technically insolvent and should not continue trading unless directors reasonably believe the company can recover. For creditors, it means pursuing the company may yield nothing.

Can a company with positive net worth still be insolvent?

Yes. The cash flow test is the second solvency test: can the company pay its debts as they fall due? A company may own property worth £1M (positive balance sheet) but have no cash to pay a £10K invoice this month. Cash-flow insolvency is harder to spot from accounts alone, which is why real-time signals matter.

What assets can creditors access if a company fails?

In liquidation, assets are sold and proceeds distributed in priority order: secured creditors with fixed charges, costs of liquidation, preferential creditors (employee wages and holiday pay), secured creditors with floating charges, prescribed part (ring-fenced for unsecured), then unsecured creditors. Unsecured creditors typically receive 0 to 10p in the pound.

How accurate are Companies House accounts?

Filed accounts represent the position at the accounting reference date, which can be 9 to 21 months before you read them. Micro-entities and small companies file abbreviated accounts that show very little detail. Directors can value assets optimistically (especially goodwill, work in progress, and related-party receivables). Accounts are a starting point, not the full picture.

Should I check net worth before pursuing a debt?

Yes. Every year, businesses spend thousands on court fees and solicitors chasing companies that have no assets to satisfy a judgment. A £29 check tells you whether the company has assets, whether it is showing distress signals, and whether pursuing the company (vs the directors personally) is the right route.

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Financial Health

Company Net Worth Check: Can This Company Pay?

Before you extend credit or spend money pursuing a debt, check whether the company actually has assets. Net worth from accounts is months old. Real-time signals tell you the position today.

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What net worth means for a company

Company net worth is total assets minus total liabilities. It appears on the balance sheet as "net assets" or "total equity" (also called shareholders' funds). A positive figure means the company owns more than it owes. A negative figure means it is technically insolvent on the balance sheet test.

How to read the balance sheet:

Fixed assets (property, equipment, vehicles)

+ Current assets (cash, debtors, stock)

- Current liabilities (creditors due within 1 year)

- Long-term liabilities (loans, creditors due after 1 year)

= Net worth (positive = solvent, negative = insolvent)

The two solvency tests

Balance sheet test

Assets exceed liabilities. This is what net worth measures. If negative, the company is balance-sheet insolvent. However, a company can be balance-sheet solvent and still fail the cash flow test.

Cash flow test

Can the company pay its debts as they fall due? A company may own property worth £1M but have no cash to pay bills this month. Cash-flow insolvency is harder to spot from accounts alone.

Hidden problems that net worth does not show

Overvalued assets. Goodwill, work in progress, and intangible assets may be carried at values that would not be realised in a forced sale. A company showing £500K net assets may have £300K of goodwill that is worthless in liquidation.

Related-party receivables. "Amounts owed by group undertakings" or "directors' loan accounts" may never be collected. If the debtor is a connected company or the director personally, the asset is often illusory.

Contingent liabilities. Pending litigation, guarantees given to third parties, and environmental liabilities may not appear on the balance sheet until they crystallise. The notes to the accounts sometimes disclose these, but micro-entity accounts have no notes.

Stale data. Accounts can be 9 to 21 months old by the time you read them. A company showing £200K net assets at year-end may have burned through that cash since. Real-time signals (filing delays, CCJs, gazette notices) reveal deterioration faster.

An accountant and a small-business client at a desk, one taking notes — Amy Hirschi / Unsplash

When to check a company's net worth

Supplier extending £50K credit

Customer wants credit terms. Their accounts show £80K net assets. But £40K is goodwill and £20K is owed by a connected company. Real tangible assets: £20K. Your exposure would be 2.5x their tangible base.

Creditor deciding whether to pursue

Company owes you £15K. Solicitor wants £3K to issue proceedings. If the company has negative net assets, you will spend £3K to get a judgment you cannot enforce. Check first.

Investor evaluating acquisition target

Target shows £2M net assets. But £800K is deferred tax assets and £400K is capitalised development costs. Tangible net worth is £800K. The asking price needs to reflect that.

Landlord assessing tenant company

Prospective tenant for a 10-year lease. Company is 2 years old with £30K net assets. Your exposure over the lease term is £500K+. The balance sheet does not support that commitment without a personal guarantee.

Accounts are months old. Get the picture today.

RecoupIQ combines accounts data with 72 real-time risk signals from 12 UK data sources: filing delays, CCJs, gazette notices, director movements, charges, and more. Quick Check (£29) gives you the instant position. Forensic Report (£167) provides full financial analysis with director conduct scoring.

Quick Check (£29) Forensic Report (£167)

Monitor financial deterioration

A company that was healthy 12 months ago may be deteriorating now. RecoupIQ monitoring (from £19.99/mo) tracks financial position over time and alerts you within 24 hours of any distress signal: late filing, new CCJs, gazette notices, director resignations. Available via the web dashboard or the Microsoft 365 Trust Check app (per-seat for teams). RecoupIQ is a Microsoft partner.

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Last reviewed: July 2026. General information for UK businesses. Not financial advice. RecoupIQ Ltd, Company No. 16947526, ICO ZC077511. Microsoft Partner.