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Equity is a term used in accounting, real estate, investing, and startup financing. In accounting, equity is found on the balance sheet and represents the book value of shareholder capital. It is calculated as assets minus liabilities. For example, if a company owns a machine worth $1 million financed by a bank loan of $800,000 and equity of $200,000, the equity is what is owed to the owner. Essentially, equity is what is left over after all debts are paid.
