Effective net worth

Effective net worth

Effective Net Worth

The net worth of an individual or company plus what he/she/it owes in junior debt. Because, in the event of liquidation, junior debt is paid only after all senior debt is paid, the individual or company has a great deal more flexibility in repayment. This flexibility has the effect of adding to the individual or company's net worth.
References in periodicals archive ?
The Company's effective net worth at June 30, 2006 was $83.
The ASI tangible effective net worth and subordinated debts covenants have been modified to bring them in line with the current tangible net worth and subordinated debt levels.
In addition to these modifications, Comerica has agreed to waive ASI's non-compliance with the previous tangible effective net worth and subordinated debt covenants as of September 30, 2010, and through the effective date of the new agreement.
Full browser ?