shareholder equity

Shareholder equity represents the owners' claim on a company's assets after all debts have been paid. It is the value remaining for shareholders if the company were to sell its assets and settle its liabilities. Think of it as the net worth of the business from the shareholders' perspective. This includes initial investments, retained earnings from profits, and can fluctuate with the company’s performance. Essentially, it shows what shareholders truly own in the company and serves as a key indicator of financial health.