Sam
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Joined: 21 May 2005
Posts: 281 Location: CALIFORNIA
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Posted: Fri Apr 09, 2004 10:56 pm Post subject: Stockholders Equity |
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Stockholders Equity refers to the total value of all the assets owned by a person or a company minus all liabilities. It helps in indicating creditworthiness and financial strength of an individual or company. It is also known as Ner Worth or Net Assets.
In other words,
Stockholders Equity = all Assets (such as house, car, furniture, investments, cash, etc.) - all Liabilities (such as mortgages, credit card bills, loans, etc.)
For example,
Let total assets = $700,000 and total liabilities = $400,000.
Therefore, Stockholders Equity = $700,000 - $400,000
Stockholders Equity = $300,000 |
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