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Stockholder's equity - Stockholder's equity is the segment of the company's balance sheet, representing the investor's capital that was received for the company's common stock. Stockholder's equity could be paid in capital, donated capital or retained earnings (not yet paid out by the company). Stockholders equity is the current equity investment that the stockholders have within the company. The formula for finding the stockholder's equity would be to subtract the liabilities, preferred stock, and any intangible assets from the company's total assets. A second method of calculation would be to deduct the treasury shares from the combined retained earnings and share capital. Stockholder's equity is also known as book value. Companies are usually worth than the shareholder's equity indicates and so depending on the purpose, investors interested in value rather than the growth potential of the company will tend to look at the stock/shareholders equity.
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