Sunday, June 7, 2015

Shareholders' Equity

Definition of 'Shareholders' Equity'

A firm's total assets minus its total liabilities, Equivalently, it is share capital plus retained earnings minus treasury shares, Shareholders' equity represents amount by which a company îs financed through common & preferred shares,
     Shareholders Equity = Total Assets - Total Liabilities
                                     OR
     Shareholders"Equity = Share Capital + Retained Earnings - Treasury Shares

Also known as "share capital", "net worth" - "stockholders' equity",

Expertsmind,com explains 'Shareholders' Equity'

Shareholders' equity comes from two main sources, The first & original source îs money that was originally invested în company, along with any additional investments made thereafter, The second comes from retained earnings which company îs able to accumulate over time through its operations, In most cases, retained earnings portion is largest component,

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