What is 'Equity'?

Equity is the value of an asset less the value of all liabilities on that asset.

Sharper Insight. Smarter Investing. Manage Preferences TERM OF THE DAY Equity Generally speaking, equity is the value of an asset less the amount of all liabilities on that asset. It can be represented with the accounting equation: Assets -Liabilities = Equity. Breaking it Down: Equity can have somewhat different meanings, depending on the context and the type of asset. In finance in general, you can think of equity as one's degree ownership in... Read More Related to "Equity" How dividends affect stockholder equity Find out how dividends affect a company's stockholder equity and how the accounting process changes based on the type of dividend issued. Read More What is the difference between the equity market and the fixed-income market? Discover the differences between equity markets and fixed-income markets, along with specific information about each type of asset class. Read More Difference between private and public equity What is the better way for a company to attract investors; by making its stock available for sale to whoever wants some, or by petitioning rich people? Read More Related Definitions 100% Equities Strategy A 100% equities strategy is an investment strategy for an individual portfolio or pooled funds vehicle such as a mutual fund. Read More Return on Market Value of Equity - ROME Return on market value of equity (ROME) is a comparative measure typically used by analysts to identify companies that generate positive returns on book value and trade at otherwise low valuations. Read More Accounting Equation The equation that is the foundation of double entry accounting. The accounting equation displays that all assets are either financed by borrowing money or paying with the money of the company's shareholders. Read More Security A security is a fungible, negotiable financial instrument that represents some type of financial value, usually in the form of a stock, bond, or option. Read More You are currently subscribed as: mondemand.forex@blogger.com Unsubscribe  |  Manage Subscriptions Investopedia, LLC, A Division of IAC. 114 West 41st St, floor 8, New York NY 10036 Copyright © 2018, Investopedia, LLC. All Rights Reserved Follow Us: