when auditors appraisers and analysts calculate the value of a business they factor all of its underlying property into the equation for example a manufacturer of small machine parts may gross just 80 000 per year but if it owns the factory in which it operates and that building is appraised at 1 million the overall value of the business would be substantially higher than profits alone suggest 
furthermore if that same company holds a patent for a part it has the potential to generate substantial income by licensing the rights to manufacture that item to a larger business rather than producing the part in house in this way licensing deals may create lucrative revenue streams that significantly boost a company s overall value establishing net worth through propertyan individual s net worth may be determined by calculating the total value of the properties they own such as real estate cars jewelry stocks bonds and retirement savings and then subtracting any liabilities or debts from that figure for example if an individual s assets include a 100 000 home a 7 000 car and a 65 000 ira the tally of their property comes to 172 000 but if that same individual is saddled with a 20 000 student loan and a 3 000 credit card bill the total liabilities add up to 23 000 thus the total net worth would be 149 000 172 000 23 000 