Shareholder equity (SE) is the stock owners’ claim after total liabilities are subtracted from total assets. The number is used as a measure of a company’s financial health.

Assets, liabilities, and stockholders' equity are three features of a balance sheet. Here's how to determine each one.

In equity accounting, this same concept of assets minus liabilities applies. Why You Need to Know About Equity The idea of a direct ownership stake via equity is fundamental to investing.

Total Liabilities and Equity = 200,000 + 300,000 = 500,000. This total matches the company’s assets, ensuring the balance sheet is balanced. Why is Total Liabilities and Equity Important?

An example of a stockholders’ equity is if a company has 300 million in assets and 200 million in liabilities, then the total stockholder’s equity is 100 million.