Verbull Word of the day
Finance glossary

Shareholders Equity

Accounting · beginner
Definition

The owners residual claim after liabilities are subtracted from assets.

Shareholders equity is what remains for owners after all debts are paid, equal to assets minus liabilities. It includes paid-in capital and retained earnings. Growing equity over time generally signals a company is building value for its shareholders.

In a sentence

Subtracting debts from assets left $6 million in shareholders equity.

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