2007-05-07 15:55:11 · 6 answers · asked by kim 2 in Business & Finance ➔ Investing
Assets are what you (or your company) have to work with. Sometimes you borrow money to better afford the things you need to work with. These are liabilities, what you owe. Equity is the value of ownership of those assets after you deduct the liabilities. Another common way of looking at it, those debts are an equity too, for the creditor, but that is an older view not often seen recently. Similarly, equity was also counted as a liability--the business is liable to creditors and stockholders. It has been renamed from time to time but it is essentially, who owns the value of the business? Those to whom value is owed. Stockholders essentially have the value that would remain after all other claims to value would be satisfied.
2007-05-07 16:11:44 · answer #1 · answered by Rabbit 7 · 0⤊ 0⤋
Equity would be the difference in what is owed and value.. heres an example.
You are financing a home.. Its worth $100,000 and you owe the bank $80,000. The $20,000 is the equity in the home.
Same with vehicles. Dealer says they will give you $10,000 for your car and you owe the bank $4000. still to pay if off, the equity would be the difference of the $6,000.
That is equity... The amount that is yours, not the banks..
YOu can also have negitive equity.. especially in a car.. Say the dealer is going to give you the $10,000, but you owe $12,000, then you have negative equity.
2007-05-07 23:07:41 · answer #2 · answered by clearwaterguy2003 2 · 0⤊ 0⤋
Equity is net worth. Assets minus liabilities for a company. The same for an individual, or the difference between your debts and all the assets you own, including cash and the cash you would have if you sold everything you owned. So, equity could be negative if you owe more than the value of the assets you own. Or positive if your debts amount to less than the value of the assets you own.
2007-05-08 01:00:06 · answer #3 · answered by jeff410 7 · 0⤊ 0⤋
I believe it is the amount of money you have paid into your house, or the amount of money you buy your house, if it's less then the appraisal then the amount of money left over is the equity: example: say the house was bought at 80,000 but it is worth 120,000 appraisal value,40,000 is the equity,you can borrow that amount to add upgrades to your home or for a car or whatever.
2007-05-07 23:08:49 · answer #4 · answered by Shawnee 5 · 0⤊ 0⤋
equity is the value of a company's shares, the property after all charges and debts have been paid.
2007-05-07 23:19:53 · answer #5 · answered by eddi 1 · 0⤊ 0⤋
equity is funds that you have in your home
2007-05-07 23:04:09 · answer #6 · answered by bggarry 2 · 0⤊ 2⤋