The accounting equation still applies where stated equity on the balance sheet is what is left over when subtracting liabilities from assets, arriving at an estimate of book value. Privately held ...

Total assets are also the sum of its total liabilities and shareholder equity because of the balance sheet accounting equation. Both types of financing are used to fund a company’s operations.

A statement of shareholders’ equity, also called a “statement of stockholders’ equity” or a “statement of owners’ equity,” is a section of a business’s balance sheet that lists the difference between ...