What is Shareholders Equity? – Share Market Tips

What is Shareholders Equity?

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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.

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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

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