A company's equity (or owners' equity for privately held companies) is the amount given to shareholders if all assets are liquidated and all debts are repaid in the event of a liquidation. When an acquisition occurs, it is the value of the firm's sales minus any obligations due by the acquired firm.

Shareholder equity may also reflect a company's book value. Equity can sometimes be used as a form of payment-in-kind. Also, it indicates the proportionate ownership of a company's shares.

On a balance sheet, equity may be seen as one of the most popular pieces of information used by analysts to measure a company's financial health.