Steven Hanley (X) Sep 8, 2016:

Patrimonio Netto Patrimonio = Equity
Netto = Net

"If you take current assets and subtract inventory from it, you are probably left with cash and cash equivalents and readily marketable securties you could use to pay off a loan."

No. Really - you need to stop, you have no clue what you're talking about. Wikipedia will tell you the answer: "Typical current assets include cash, cash equivalents, short-term investments, accounts receivable, stock inventory and the portion of prepaid liabilities which will be paid within a year."

As I said, it means "p. netto: net worth; net assets; net equity; owners' equity; shareholders' equity; proprietary equities." Without further context it can mean ANY of those things; what it CAN'T mean is all the nonsense you're spouting.

The more you try to switch your story, the deeper into it you dig yourself. Drop the "try to pay off a loan" business - you don't know anything about accounting. Best I can tell they're talking about subsidiaries, affiliates, and associates. IF they're talking about that, see:

https://www.pwc.lu/en/ifrs/docs/pwc-ifrs-and-luxembourg-gaap...

It's different in every country. We don't know. So: Patrimonio = equity. Netto = net.

James (Jim) Davis Sep 8, 2016:

Please stop "equity net of fixed assets, debt and inventory" is not what you originally said. You said "Net equity is current assets - (debt + inventory)" which I've seen online, but it makes no sense because inventory = current assets."
You are right. If you take current assets and subtract inventory from it, you are probably left with cash and cash equivalents and readily marketable securties you could use to pay off a loan. However, if you have a lot of debt then some of that would be tied up, so if you subtract debt from those current assets as well, you are left with what you could use to pay of a new loan from a bank and banks call that "net equity" and use it as an indicator when deciding to grant loans.
Now to repeat, when you used the word "net equity" what did you mean please? Give me a clear equation and I might "stop" :-).

James (Jim) Davis Sep 8, 2016:

Please stop? Steven this is a place to discuss language. You wrote "net equity". The common term I know is the standard balance sheet equation where "equity + liabilities = assets" as in the investopedia link you posted http://www.investopedia.com/ask/answers/070915/how-do-you-ca... which gives "equity = asssets - liabilities" which is the the corollary. Now I know "patrimonio netto" as precisely the same thing as equity in these equations. Another term for it is "mezzi propri". Now what I am asking you is when you wrote "net equity" what did you mean?

Steven Hanley (X) Sep 8, 2016:

Please stop. First, that wasn't the question. Second, the dictionary definition of patrimonio netto is: "p. netto: net worth; net assets; net equity; owners' equity; shareholders' equity; proprietary equities." This is most likely what it refers to: "The net equity of a company is also referred to as retained earnings."

http://www.investopedia.com/ask/answers/020415/what-differen...

But from what is posted there is no way to know what is being referred to, so since IFRS and GAAP standards aren't the same, and Italy allows both IFRS and Italian CIvil Code accounting to be used, and there is no one-to-one correspondence between the Italian and English terms, and "net equity" can refer to many, many things in English, in my opinion it's just best to leave it at what it literally says, unless there is anything to support it to make it more precise. More precise information is not available.

"equity net of fixed assets, debt and inventory" is not what you originally said. You said "Net equity is current assets - (debt + inventory)" which I've seen online, but it makes no sense because inventory = current assets.

No more.

James (Jim) Davis Sep 7, 2016:

@Steve "net Equity" Hi Steve as investopedia tells us, "equity" is total assets - total liabilities. So what is "net equity" I mean what is it net of? "patrimonio netto" is "net assets" which is "equity" not "net equity". If you take equity net of fixed assets, debt and inventory then what you are left with is fairly liquid assets which might pay off a bank loan if the bank called it in. Net equity is an indicator used by banks when processing loan applications from businesses. "net equity" is not "patrimonio netto".