Owner's Equity

Owner's equity, also known as shareholders' equity or stockholders' equity, represents the residual interest in the assets of a company after liabilities are subtracted. It represents the portion of the company that is owned by the shareholders or investors. It can be calculated as:

Owner's equity = Assets - Liabilities

Examples of items that may be included in owner's equity are:

• Common stock: The value of the shares of stock that have been issued to shareholders

• Retained earnings: The portion of a company's profits that have been reinvested in the business rather than being distributed as dividends

• Additional paid-in capital: The amount of money that shareholders have invested in the company in excess of the par value of the stock

• Treasury stock: Shares of stock that have been repurchased by the company and are held in its own treasury

It is important to note that owner's equity is the equity that is owned by the shareholders, not the management team, employees, or any other stakeholders.