Equity

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stockholders' equity
The balance sheet quantity of a company's common stock equity. This quantity equals total assets less liabilities, preferred stock, and intangible assets such as goodwill.

Stockholder’s equity consists of contributed capital and retained earnings.

The quantity of stockholder’s equity indicates how much the company would have left over in assets if it were to go out of business immediately.

As most companies are expected to grow and generate more profits in the future, they end up being worth far more in the marketplace than the value of their stockholders' equity.

This is why stockholder’s equity is more important to value investors than growth investors. Stockholder’s equity is often called the book value of a company.