Stockholders’ Equity

[STAHK-hohl-durz EK-wi-tee]

What is the definition of Stockholders’ Equity?

Stockholders' equity represents the ownership interest of shareholders in a corporation, calculated as the difference between total assets and total liabilities.

Using Stockholders’ Equity in an Example

In a balance sheet, stockholders' equity might include common stock, preferred stock, retained earnings, and accumulated other comprehensive income. If a company has total assets of $500,000 and total liabilities of $300,000, the stockholders' equity would be $200,000.

Using Stockholders’ Equity in a sentence

During the annual meeting, the CFO discussed the increase in stockholders’ equity, attributing the growth to improved earnings and effective debt management.

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