Equity

A term in accounting, home ownership, investing, and start-up; it is the book value (money value) of shareholder’s capital(virtual money) invested in the respective areas mentioned. In-home ownership, it’s the value of the house minus what is owed to the creditor(s). It’s the net value of the assets left after paying off liabilities.

Equity refers to the ownership interest in an asset, such as a company or property. In the context of a company, equity represents the residual interest in the assets of the company after deducting liabilities. It is the value of the company that would be left over for shareholders if all debts were paid off. There are several types of equity, including common stock, preferred stock, and retained earnings.

Common stock represents ownership in a company and provides the holder with voting rights and the potential to receive dividends. Preferred stock is a type of stock that has a higher claim on assets and earnings than common stock but typically has no voting rights. Retained earnings represent the portion of a company's profits that are kept by the company rather than being distributed as dividends to shareholders.

Equity can also refer to the difference between the market value of a property and the amount of debt outstanding on that property. In this context, equity represents the amount of the property that is owned outright by the homeowner rather than being financed through a mortgage.

Equity is an important concept in finance as it represents the amount of money that shareholders would receive if the company were to liquidate its assets and pay off its debts.