Shareholders' Equity
Also called: stockholders equity, book value of equity, net assets
Shareholders' equity is assets minus liabilities — the owners' residual claim, and the balancing figure of the balance sheet. It's a book number that can diverge wildly from market value, because intangibles built internally are largely absent from it while acquired ones are not. Aggressive buybacks can even push it negative without the business being in any trouble.
Formula
Shareholders' equity = Total assets − Total liabilities
Want more than a definition? Learn it in Capital Quarters →