What is the average shareholder equity

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Popular Courses. Financial Ratios Guide to Financial Ratios. Key Takeaways Shareholders' equity represents the net worth of a company, which is the amount that would be returned to shareholders if a company's total assets were liquidated and all of its debts repaid. This financial metric is frequently used by analysts to determine a company's general financial health.

Shareholders' equity may be calculated by subtracting its total liabilities from its total assets, both of which are itemized on a company's balance sheet. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts.

We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation.

This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. Related Articles. Partner Links. Related Terms Stockholders' Equity Stockholders' equity is the remaining amount of assets available to shareholders after paying liabilities. What Is the Accounting Equation? The accounting equation defines a company's total assets as the sum of its liabilities and shareholders' equity.

Equity Definition Equity typically refers to shareholders' equity, which represents the residual value to shareholders after debts and liabilities have been settled. Learn What Capital Employed Is Capital employed, also known as funds employed, is the total amount of capital used for the acquisition of profits.