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Stockholders equity

Stockholders equity
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Answer #1

Shareholders equity refers to the money invested by the owners in the company for the profit making purpose. It is also the difference between assets and liabilities of the company.It also includes retained earnings which indicates the accumulated profits of the company over the years.Therefore it is often called as networth.

Shareholders equity = Total assets - Total Liabilities

or = sharecapital + retained earnings

Share capital indicates the money invested in the company by its owners

Retained Earnings indicates profit earned by the company over the years

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