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the statement of stockholders equity is important because it tells you why a companys equity accounts change from one balance sheet date to the next balance sheet date if you look at a companys balance sheet as of december 31 2021 youll see all its different stockholders equity accounts youll see common stock retained earnings and any other equity accounts the company happens to have but it wont tell you why those accounts have increased or decreased since the last balance sheet date and thats what youre going to find on the statement of stockholders equity so lets do a really really simple example for this company rubber monster and they just have two equity accounts theyve got common stock and theyve got retained earnings so weve got a real simple statement of stockholders equity here that we can easily understand so our balance in the account so weve got our common stocks these are in thousands so itd be 2.5 million at the beginning of the period which was december 31st
