Fundamental analysis
Shareholders’ equity
Definition
Assets minus liabilities, also called book value: what would be left for the owners if every asset were sold at its balance sheet value and every debt repaid.
Example
Say company XYZ has $2 billion of assets and $1.4 billion of liabilities, so shareholders’ equity is $600 million. If a factory carried on the balance sheet at $500 million would actually sell for only $300 million, the owners would be left with $400 million, because book value uses balance sheet values, not market prices.
Hypothetical numbers, for illustration only.
UpTickFlow is our product. These guides are education, not financial advice. Trading involves a substantial risk of loss.