Equity represents the value that will be returned to the company's shareholders if all assets are liquidated and all debts of the company have been paid off.<br>We can also think of equity as the degree of residual ownership of a company or asset after deducting all liabilities associated with the asset.<br>Equity represents the shareholder's share in the company as determined on the company's balance sheet.<br>Equity is calculated by subtracting total liabilities from the company's total assets and used in several key financial ratios, such as roe.<br>
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