Definition of Equity in Business | Accounting Definition

Accounting Definitions

Browse terms alphabetically

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Equity Definition

Term Definition
Equity in a business represents the money or assets contributed to a business by the owner(s) of the business. It can also refer to the value of a business.

Extended Definition
Money invested in a business is called equity. Equity is determined by subtracting liabilities from assets. Equity can also refer to the value placed on a business, as it reflects the money and assets left over after liabilities have been paid. When equity is positive, the business is generally profitable. When businesses are losing money, equity is generally a negative number.

Related Article
What Is Equity in a Business?

Get Started
Try it free

Sign up today for a free, no-obligation 30-day trial.

Try It Free for 30 Days
Get Started
Take a demo

Kick the tires with a free self-guided demo.

Take a Self-Guided Demo