What Is Shareholders' Equity?

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What Is Shareholders' Equity?

Shareholders’ equity is the value of a business to its owners after all of its obligations have been met.

A firm’s assets exceed its liabilities in the amount. This net worth belongs to the owners.

What it means

Shareholders’ equity generally reflects the amount of capital the owners invested, plus any profits that the company has generated that are subsequently reinvested into the company. This reinvested income is called retained earnings.