What term is used for the amount that assets exceed liabilities?

The term that describes the amount by which assets exceed liabilities is equity. Equity represents the ownership value in a company after all liabilities have been subtracted from total assets. This concept is fundamental in finance as it reflects the residual interest that shareholders have in the company.

When evaluating a company's financial health, equity is a critical measure, as it indicates the net assets that belong to the owners or shareholders. If a company's assets total $1 million and its liabilities total $700,000, the equity would be $300,000. By understanding equity, stakeholders can assess the value of their investment relative to the company's obligations.

In contrast, net worth typically refers to the personal financial position of individuals and is similar, but not synonymous, with equity in a business context. Surplus usually implies additional benefits or amounts over and above what is expected or required, which is not as specific as equity in reflecting asset ownership. Capital generally refers to financial resources or assets that can be used in the production of goods and services, but it does not directly indicate the relationship between assets and liabilities. Hence, equity is the most precise and widely used term for this concept.