What does 'net assets' refer to in financial terms?

In financial terms, 'net assets' represents the residual interest in the assets of an entity after deducting its liabilities. This means that net assets are calculated by subtracting total liabilities from total assets, which is reflected in the choice indicating assets minus total liabilities.

When this calculation is performed, the result shows what is left for the owners or shareholders after all debts and obligations have been satisfied. Net assets can also be understood as an indication of a company's financial health and can help assess its ability to meet long-term obligations.

This definition aligns with fundamental accounting principles, such as the accounting equation (Assets = Liabilities + Equity), where net assets can also be seen as synonymous with equity in a business context. This makes option B an essential concept in understanding the financial position of an organization.

Other choices are not aligned with the definition of net assets; total liabilities only reflect what the business owes, total cash on hand pertains solely to liquidity, and revenue minus expenses relates to profitability rather than the net worth of assets.