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Commonly Asked Questions about Stockholder’s equity section of the Balance Sheet Templates

Shareholders equity = common shares + preferred shares + paid-in capital + retained earnings.
Shareholder equity (SE) is a companys net worth and it is equal to the total dollar amount that would be returned to the shareholders if the company must be liquidated and all its debts are paid off. Thus, shareholder equity is equal to a companys total assets minus its total liabilities.
Six potential components that comprise the owners equity section of the balance sheet include: contributed capital, preferred shares, treasury shares, retained earnings, accumulated other comprehensive income, and non-controlling interest.
Four components that are included in the shareholders equity calculation are outstanding shares, additional paid-in capital, retained earnings, and treasury stock. If shareholders equity is positive, a company has enough assets to pay its liabilities; if its negative, a companys liabilities exceed its assets.
Stockholders equity refers to the assets remaining in a business once all liabilities have been settled. This figure is calculated by subtracting total liabilities from total assets; alternatively, it can be calculated by taking the sum of share capital and retained earnings, less treasury stock.
Shareholders equity is the amount that the owners of a company have invested in their business. This includes the money theyve directly invested and the accumulation of income the company has earned and that has been reinvested since inception.
Stockholders equity might include common stock, paid-in capital, retained earnings, and treasury stock. Conceptually, stockholders equity is useful as a means of judging the funds retained within a business.
Preferred stock, common stock, additional paid‐in‐capital, retained earnings, and treasury stock are all reported on the balance sheet in the stockholders equity section. Information regarding the par value, authorized shares, issued shares, and outstanding shares must be disclosed for each type of stock.