Shareholders Equity Made Easy

Shareholders Equity

Shareholders Equity is equal to total assets minus total liabilities. It indicates what is actually the shareholders own.

Total assets include anything owned by the companies that has tangible value and can be sold. Examples are property, plant and equipment, intangible assets, biological assets, investment properties, investment in subsidiaries, investment in associates, other investments, deferred tax assets, goodwill, cash and cash equivalent, inventory, as well as accounts receivable.

Total liabilities on the other hand is any obligation that the company might have. For examples, the unpaid mortgage or loan, deferred tax liabilities, current tax liabilities or the outstanding money owed to suppliers.

These total assests and liabilities value is made available in the balance sheets inside the annual reports.

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