Shareholder Equity

Shareholder equity, also known as stockholders' equity or owners' equity, is the portion of a company's total assets that is owned by the shareholders or owners of the company. It represents the residual interest in the assets of the company after deducting all liabilities.

In other words, shareholder equity is the amount of the company's assets that would be left over if all of its liabilities were paid off.

Shareholder equity can be calculated using the same formula as the previous section.

$$Equity = Assets - Liabilities$$

Let's quickly break down what could be considered Assets:

• Property

• Buildings

• Equipment

• Accounts Receivable

And what could be considered Liabilities:

• Loans

• Security obligations

• Accounts Payable

Let's take the accounting equation from the previous section and apply it to the above to breakdown shareholder equity.

To calculate the equity per share, you would divide the total equity by the number of outstanding shares. If the number of outstanding shares is not provided, you cannot calculate the equity per share.