The farm's market value net worth changed by what percentage from a year ago?

The farm's market value net worth changed by what percentage from a year ago?

• A. 9%
• B. 5%
• C. -2%
• D. 12%

Answer: (A)

Understanding how market value net worth changes tells you whether the farm’s financial position has strengthened or weakened over a year. Net worth is the market value of assets minus liabilities. To find the change in percentage, compare this year’s net worth to last year’s: (current net worth − last year’s net worth) ÷ last year’s net worth × 100. A positive result means improvement; a negative result means a decline. If the change is 9%, that means the current net worth is 1.09 times last year’s, i.e., it increased by 9%. This rise could come from asset values increasing, debt decreasing, or profits retained in the business. The other numbers would indicate a smaller gain, a loss, or a larger gain, respectively, so they don’t describe the actual change.

Understanding how market value net worth changes tells you whether the farm’s financial position has strengthened or weakened over a year. Net worth is the market value of assets minus liabilities. To find the change in percentage, compare this year’s net worth to last year’s: (current net worth − last year’s net worth) ÷ last year’s net worth × 100. A positive result means improvement; a negative result means a decline. If the change is 9%, that means the current net worth is 1.09 times last year’s, i.e., it increased by 9%. This rise could come from asset values increasing, debt decreasing, or profits retained in the business. The other numbers would indicate a smaller gain, a loss, or a larger gain, respectively, so they don’t describe the actual change.