The equity section of the balance sheet equals assets minus liabilities. Traditionally the equity section is referred to as the net worth of the company. If you were to dispose of all the assets through a sale and pay off liabilities, the money left over would be available for distribution to the shareholders. The shareholders basically own the equity section of the balance sheet.
In the equity section of the balance sheet there is an account that tallies the lifetime earnings net of dividends for the company. The value identifies the total amount retained by the company for operational […]