Equity, also known as net assets, is a finance term that refers to the amount of money that a company’s owners have invested in it. Also referred to as “owner’s equity” and can include non-monetary assets such as time, energy, and other resources.
Equity is also defined as the difference between your company’s assets and liabilities (what you owe).
A company with strong (positive) equity is appealing to potential investors, lenders, and buyers. Investors and analysts also consider your company’s EBITDA, or earnings before interest, taxes, depreciation, and amortization.
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