# Equity Calculator

The net difference between a company's entire assets and its total liabilities is known as a company's equity, or shareholders' equity.

Shareholder’s equity tells you how much would be left over for shareholders if you sold all your assets and paid off any debts and liabilities.

You can use the information on your company’s balance sheet to calculate your company’s equity.

Use this free tool to help with all your equity calculations.

TAXES AND BOOKKEEPING

Equity and Investment Calculator
How much investment capital should you accept? And how much equity should you give up? We’ve partnered with FlashFunders to help make this decision a bit easier. Simply enter your current valuation and the amount of new investment, and let the calculator do the rest.
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## How to Calculate Equity for a Business

The formula is straightforward:

Equity = Total assets - Total liabilities

However, depending on the size of your business or other investments, accessing all the figures for assets and liabilities may be a complex task.

## Assets and Liabilities

So, what exactly are a company’s assets and liabilities, and where can you find that data?

You can see a breakdown of your assets and liabilities on your company’s balance sheet.

When we speak of ‘total assets’, we include assets you can convert into cash easily within one year, things like cash, accounts receivable, and inventory. We name these your current assets.

Also within ‘total assets’ are investments, property, equipment, and other intangibles that you couldn't convert into cash so quickly. We call these longer-term assets non-current assets.

We split total liabilities into two categories, too.

There are the payments you need to make within one year like accounts payable and taxes payable. We call these your current liabilities.

On the other hand, there are obligations that are due for repayment over longer periods like bonds, pension obligations, and leases. We call these long-term liabilities.

A well-organised balance sheet will let you see your current assets, non-current assets, current liabilities, and long-term liabilities all in one place.

## Why is Equity Important?

Shareholder’s equity is one of many metrics that analysts use to assess your company’s worth.

A business’ shareholder equity could either be positive or negative.

If it is positive, this means that your business has enough assets to cover its liabilities. This is a marker of financial stability. If you chose to liquidate the company, pay off all debts and sell all assets, you would have money left over.

However, if you have negative equity, it means that you don’t have enough assets to pay off your liabilities.

If negative equity continues for a prolonged period, you may need to register for insolvency.

However, equity isn’t the only metric used to gauge a company’s worth. You would view your equity alongside other documents such as an income statement or a cash flow statement to build a better picture of worth.

## How QuickBooks Can Help

Building an accessible, comprehensive picture of your assets and liabilities can be a challenge.

With QuickBooks’ powerful accounting software, you get realtime financial insights through various straightforward reporting options.

In addition to this equity calculator, you can automatically assess business performance and monitor cash flow through your balance sheet and other reports such as cash flow statements and income statements.

Having these insights at your fingertips from any device means you can conveniently get a holistic view of your business performance and plan ahead to manage your various assets and liabilities.