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Gangesh Rameshkumar

Figure it out • 2d

Today's term of the day: Equity Equity, in simple terms, is the money that is returned to all the shareholders of a company, if all the company's assets are liquidated and liablities are paid off. It is also a measure of the financial health of a corporation. From the definition, it's kinda obvious how to calculate equity: It's literally just assets - liabilities. If assets exceed liablities, the company is said to be solvent and is also said to have positive equity. If liabilities exceed assets, the company is said to be insolvent and is also said to have negative equity. All in all, equity is a fancy term that tells you how much of a company belongs to the shareholders

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