This ration contrast the potential liability on the project to the funds invested within the business. The net worth is calculated as total assets (excluding intangibles) less total liabilities.The Net worth provides a measure of the equity investes within a business, which should be adequate as basis to fund the cintract cash flows. Additionally, the higher the net worth of a company the greater the security to creditors.
The net worth should be at least 20% of the contract value