Thursday, September 1, 2016

Equity is the net on any asset that you own.

Equity = Assets - Liability.  Investors and potential buyers measure the value of an asset by its equity.  

There is also shareholder's equity, stocks that represents ownership in a business.  Anothet name for ownership shares is stock.  

In accounting and finance, equity is the difference between the value of the assets and the cost of the liabilities of something owned.  For example, if someone owns a car worth $15,000 but owes $5,000 on a loan against that car, the car represents $10,000 equity.  Equity can be negative if liability exceeds assets.  
In an accounting context, 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.  Accounting shareholders are the cheapest risk bearers as they deal with the public.  Negative shareholders' equity is often referred to as sharesholders' deficit.  
For purposes of liquidation during bankruptcy, ownership equity is the equity which remains after all liabilities have been paid.  
This way we know. 



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