stockholders' equity

Definition

A company's common stock equity as it appears on a balance sheet, equal to total assets minus liabilities, preferred stock, and intangible assets such as goodwill. This is how much the company would have left over in assets if it went out of business immediately. Since companies are usually expected to grow and generate more profits in the future, most companies end up being worth far more in the marketplace than their stockholders' equity would suggest. For this reason, stockholders' equity is of more interest to value investors than growth investors. also called book value.

Use this term in a sentence

Stockholders' equity is important to value investors because it shows these investors how many assets the company possesses.

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equity turnover debt-to-capital ratio