Total Equity

Definition: Total Equity is the residual interest in the assets of an entity after deducting all liabilities, equal to the sum of all components of stockholder…

Total Equity is the residual interest in the assets of an entity after deducting all liabilities, equal to the sum of all components of stockholders' equity. Total Equity = Total Assets − Total Liabilities. For a corporation it includes contributed capital (common stock, preferred stock, additional paid-in capital), retained earnings, accumulated other comprehensive income, and is reduced by treasury stock. The terms Total Equity, Stockholders' Equity, and Shareholders' Equity are used interchangeably in US GAAP. Total Equity is the denominator of Return on Equity and the Equity Multiplier.