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Finance & Banking vocabulary · Financial Statements

Equity

Meaning in finance & banking, with examples

/ˈekwəti/nounCore term

In finance & banking, equity means: The owners' share of a company: what is left when liabilities are taken away from assets. It includes paid-in capital and retained profits.

In Turkish: özkaynak, özsermaye, hisse senedi

How it is used

A key word in balance sheet analysis and capital discussions: shareholders' equity, return on equity (ROE), raising equity. In markets, 'equities' means shares. 'Home equity' is the part of a home's value that the owner fully owns.

Example sentences

  1. The bank's equity rose after it kept most of last year's profit.

  2. Return on equity is the first ratio our investors ask about.

Common collocations

  • shareholders' equity
  • return on equity
  • raise equity
  • equity ratio
  • negative equity
  • assetSomething of value that a person or company owns or controls, such as cash, buildings, receivables or investments.
  • liabilityMoney or another obligation that a company owes to others, such as loans, unpaid bills or, for a bank, its customers' deposits.
  • capitalMoney and other financial resources used to start and run a business; for banks, the owners' funds that absorb losses and protect depositors.
  • balance sheetA financial statement showing what a company owns (assets), what it owes (liabilities) and the owners' share (equity) on a specific date.
  • leverageUsing borrowed money to finance assets or investments, or the level of a company's debt compared with its equity or earnings.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Financial Statements

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This page explains English vocabulary for learners. It is not financial advice.