Ownership equity

Ownership equity refers to the value of an individual's or entity's interest in a business or asset after subtracting any debts or liabilities owed. In practical terms, it’s the portion of the company that the owners truly own outright—like the difference between the total value of a house and any mortgage on it. For a company, equity represents the owners’ claims on its assets, accumulated through investments or retained earnings. It’s a key indicator of financial health and ownership stake, showing how much of the business is owned free and clear.