Equity in Accounting

What is Equity in Accounting?

Equity refers to the ownership interest or residual claim that shareholders have in a company after all debts and other obligations have been paid off. In other words, it represents the value of a company’s assets minus its liabilities.

How to measure it?

Equity can be measured in different ways, such as through the book value of a company’s assets or the market value of its shares. The latter is determined by the supply and demand for the company’s shares in the stock market, which can fluctuate depending on a variety of factors such as financial performance, market conditions, and investor sentiment.

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