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Shareholders' equity

• Also known as Equity and Net Worth. The term identifies shareholders' ownership interest in a company. Equity is useful in measuring the performance of a company's management (called Return on Equity, abbreviated ROE).
The equity ownership of the company is usually held by two classes of shareholders Preferred and Common. It may include preferred and common shares, paid-in capital (capital surplus), Retained Earnings (earned surplus), and Treasury Stock.
The accounting definition is: all assets on a balance sheet (including intangibles) minus all liabilities (current, non-current liabilities, and long-term debt.

• This is a company's total assets minus total liabilities. A company's net worth is the same thing.

 
 

Follow this link for all the terms related to equity.

 
 Embedded terms in definition
 Assets
Balance sheet
Capital surplus
Capital
Common shares
Current liabilities
Debt
Earnings
Equity
Held
Interest
Liabilities
Net worth
Net
Retained earnings
Return on equity
Return
Shareholders
Shares
Stock
Total assets
Treasury stock
 
 Related Terms
 

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