Plain-English definitions, reviewed by an independent investor
Equity
Equity is ownership value — shareholders’ residual claim after debts are paid.
Equity is ownership value — shareholders’ residual claim after debts are paid.
Equity = Assets − Liabilities
Why it matters
It is what stockholders actually own once everyone else is paid.
Common confusion
Equity can be zero or negative in distress; it is the last slice paid.
Frequently Asked Questions
Equity vs stock?
Stock is the certificate; equity is the ownership value behind it.
Home equity?
Same idea: your home’s value minus the mortgage you owe.