Total equity

Total equity can be viewed as the net value of a business. In simple terms, total equity represents what remains for the shareholders if all the company's assets are to be liquidated, and all debts are fully repaid. It is prominently displayed as a line item on the balance sheet.

In essence, total equity illustrates the residual value after subtracting the total liabilities from the total assets. Analysts and investors commonly use this metric to gauge a company's financial standing and evaluate its overall financial stability and performance.

Back to