Financial health
Shareholders' equity
Equity
What it is
What would be left for shareholders if the company sold every asset and repaid every debt. In accounting terms: total assets minus total liabilities.
How to read it
Equity growing year after year reflects earnings retained rather than paid out. It's the base on which return on equity is computed.
What it does not tell you
A BOOK value, often far from real value: a brand or software built in-house barely appears, which can leave highly profitable companies with negative equity.
Other measures — Financial health
Educational content. Polaris is not a registered investment adviser and makes no recommendation.