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Equity

In: Financial Freedom

Author

Listed:
  • Reuben Advani

Abstract

The final and most often misunderstood part of the balance sheet is what we call equity. Equity is a common topic of discussion in the business world. From real estate to the stock market, deals revolve around it. Ultimately, everyone wants to know how much of something they own. In personal finance, equity is built around similar principles. Equity gives us an indication of how much we actually own after accounting for what we owe. Equity is the difference between assets and liabilities. If assets exceed liabilities, you are actually worth something (financially speaking, of course). And if liabilities exceed assets, well … let’s just say we have some work to do.

Suggested Citation

  • Reuben Advani, 2013. "Equity," Springer Books, in: Financial Freedom, chapter 0, pages 17-22, Springer.
    • Handle: RePEc:spr:sprchp:978-1-4302-4540-7_3
    DOI: 10.1007/978-1-4302-4540-7_3
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