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Balance sheet

Shareholders' Equity

The owners' residual stake in a company — what would be left for shareholders if all assets were sold and all debts paid.

Part of the Reading Financial Statements course · Lesson 22 of 33
Formula
Total Assets − Total Liabilities

What it is

Shareholders' Equity (also called book value or net worth) is the portion of a company that belongs to its owners after subtracting everything it owes. It is built from money raised by issuing shares (paid-in capital) plus accumulated profits kept in the business (retained earnings), less items like treasury stock and accumulated losses. It is the bottom section of the balance sheet.

Why it matters

Equity is the cushion that absorbs losses before creditors are at risk, and it is the base for Return on Equity, a core profitability measure. A pitfall is that equity can be negative — common in companies that have bought back many shares or run sustained losses — which is not always a sign of distress and must be read in context.

How it's calculated

Subtract total liabilities from total assets, or add up its components: contributed (paid-in) capital plus retained earnings and other reserves, minus treasury stock.

How Quintarthai uses it

Shareholders' Equity is shown in the 10-year balance sheet on the Financials tab, and it drives the ROE figure in the Summary key-metrics grid at /app/.

Cross-border note. IFRS and US GAAP both report it as equity, but IFRS revaluation reserves and different treatment of certain items mean a Canadian filer's book value may not be directly comparable to a US peer's without adjustment.

FAQ

Is Shareholders' Equity the same as market capitalization?
No. Equity is the accounting book value on the balance sheet, while market cap is the market's price for the shares; they often differ widely.
Can Shareholders' Equity be negative?
Yes — if liabilities exceed assets, often due to large buybacks or accumulated losses; it requires context rather than an automatic red flag.
Related terms
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