What is the result of subtracting liabilities from assets?

Subtracting liabilities from assets yields the concept of net worth, also known as equity. This calculation represents what a business or individual owns outright, as it reflects the residual interest after all debts have been settled. In the context of a hotel or lodging operation, this is an important measure of financial health, as it indicates the value that belongs to the owners after all obligations are accounted for.

When a business has more assets than liabilities, it shows that the business is solvent and has a solid financial foundation. This figure can be critical for potential investors or lenders who want to understand the financial stability of the business. On the other hand, operating income, gross revenue, and total assets represent different aspects of financial performance and do not specifically indicate the net worth or equity of the organization. Operating income reflects the revenue generated from normal business operations, gross revenue accounts for total income before any deductions, and total assets encompass everything the business owns without considering liabilities. All these are important metrics, but they serve distinct purposes in assessing a company's financial status.