Equity is the ownership an individual or organization holds in a business. This could be in the form of stocks or property or even goods. The common types of equity are stockholder's equity, private equity, etc. Knowing, understanding, and monitoring equity can help businesses know their financial health.
For estimating their equity, companies must add up total assets and remove net liabilities from it. The formula for calculating equity is Company's total assets - Company's total liabilities = Stockholder's equity