Shareholder’s Equity 

Shareholder’s Equity (also called Stockholders' Equity or Owners' Equity) represents the residual interest in a company’s assets after deducting all its liabilities. It shows how much of the company is owned by its shareholders and is an important measure of a company’s net worth. 

Formula: 

Shareholder’s Equity = Total Assets - Total Liabilities    

Components of Shareholder’s Equity typically include: 

• Paid-in capital (money invested by shareholders) 

• Retained earnings (profits reinvested in the business) 

• Treasury stock (repurchased shares held by the company) 

• Other comprehensive income 

It appears on the company’s balance sheet and is a key factor in evaluating financial stability and business valuation.