Talk:Shareholders' equity

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Shareholder equity was moved here. It's not the shareholder equity. The shareholders are not equity, they're flesh and blood. It's the shareholder's equity.--Jerryseinfeld 06:14, 9 Jan 2005 (UTC)

Sometimes it's the "shareholders' equity", assuming they are more than one ([1]).--Jerryseinfeld 06:16, 9 Jan 2005 (UTC)

Shareholder equity is fine, just as shareholder value is fine. Only a person with no knowledge of English grammar could imagine that "shareholder" in either case is being used as a noun. —Preceding unsigned comment added by 12:01, 21 September 2006 (talk)

Use of earnings[edit]

If the calculation is : retained earnings from the prior year + net income of the year at hand (revenues - expenses) - dividends paid during the year at hand , What about the use of the earnings by the compnay to fund a future investment or expansion ?? Isn't that a withdrawl from the earnings and therefore it reduces the shareholder's equity like: retained earnings from the prior year + net income of the year at hand (revenues - expenses) - dividends paid during the year at hand - Withdrawls by the company ?? Is that right ? —Preceding unsigned comment added by 06:34, 9 October 2006 (talk)

Answer. You are confusing cash flows with revenues/expenses. Paying money (asset='cash' decreases) to build a long-term plant (asset='fixed asset' increases) just changes two items on the Balance Sheet. There is no effect on the Equity. The 'equation' that was given is wrong. I have corrected it.Retail Investor 02:36, 14 October 2006 (UTC)

Answer. I agree. The use of earnings for further investment does not reduce the shareholders equity. It is referred to as 'inside equity' since it is money for investment that comes from the inside, but it is also equity, since kept in cash, invested or distributed, it is money owned by shareholders. —Preceding unsigned comment added by 06:08, 28 April 2007 (talk) Financeeditor


A firm's total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity represents the amount by which a company is financed through common and preferred shares.

Shareholders' Equity = Total Assets - Total Liabilities


Shareholders' Equity = Share Capital+Retained Earnings - Tresury Shares

Also known as "share capital", "net worth" or "stockholders' equity". Shareholders' equity comes from two main sources. The first and original source is the money that was originally invested in the company, along with any additional investments made thereafter. The second comes from retained earnings which the company is able to accumulate over time through its operations. In most cases, the retained earnings portion is the largest component. —Preceding unsigned comment added by 14:38, 6 June 2007 (talk)

Better translation[edit]

This article reads like it was imperfectly translated out of another language. Can someone who actually understands how this term is used in English-speaking countries' accounting rules please fix it? 121a0012 21:36, 31 January 2007 (UTC)