What is Shareholders Equity?
Shareholders’ equity (or stockholders’ equity, shareholders’ funds, shareholders’ capital or similar terms) represents the equity of a company as divided among shareholders of common or preferred stock. Negative shareholders’ equity is often referred to as a shareholders’ deficit.
Alternatively, equity can also refer to a corporation’s share capital (capital stock in American English). The value of the share capital depends on the corporation’s future economic prospects.
Shareholders’ equity is obtained by subtracting total liabilities from the total assets of the shareholders. These assets and liabilities can be:
# Equity (beginning of year)
# + net income
# − dividends
# +/− gain/loss from changes to the number of shares outstanding.
# = Equity (end of year) if one gets more money during the year or less or not anything
What is Shareholders Equity? < Share Market Tips