1 / 8

What is Equity - Leigh Barker Accountant

Equity is basically the difference between the value of all assets owned and the cost of any associated liabilities. For more details, you can also visit here: https://leighbarkerblog.wordpress.com/

leighbarkergordon
Download Presentation

What is Equity - Leigh Barker Accountant

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. WHAT IS EQUITY – LEIGH BARKER

  2. Introduction Equity is basically the difference between the value of all assets owned and the cost of any associated liabilities. Within the context of accounting, while the term equity is applied in numerous ways it generally refers to an ownership interest in a business.

  3. Equity = Assets – Liabilities Equity represents what the business owes to its owners which is a reflection of the capital remaining in a business after all the assets of the entity are used to pay off the liabilities of the business.

  4. great significance to a business owner Equity is of great significance to a business owner as it represents that portion of the total assets of the company that the owner owns which may also be referred to as net worth. For example, if an owner purchased cafe worth $500,000 with a $400,000 loan and $100,000 in cash then the owner has acquired an asset of $500,000 but only has $100,000 of equity.

  5.  Value of Equity  Equity will increase as the value of assets increase. These increase may be derived from such items as the value of the property owned, income streams, shares, client base plus any other asset that can increase in value.

  6. two components In a balance sheet equity will generally comprise two components being • capital received from the sale of company shares OR (2) retained earnings which are profits not distributed to owners or shareholders

  7. Leigh Barker Accountant Prepared by Leigh Barker Accountant at MWC Group, Tangible Assets, Portfolio Finance, Gordon and West Pennant Hills. Note that all content of this blog is general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstance.

  8. Visit Leigh Barker’s Blog https://leighbarkerblog.wordpress.com/

More Related