Owners Equity Synonym
Q: Owner's equity is also known as _____________?
There are a few synonyms for owner's equity.
As you will see in the comments at the bottom of the page, many people believe that equity and capital are synonyms. Actually, that's not true.
Check out this question and answer where I go over the two terms and the differences between them: Is Equity and Capital the Same?
In my opinion, the most common and accurate synonym for owner's equity is: net asset value.Net asset value
is the value of all assets after deducting all liabilities (meaning the value of debts to external parties).
"Net" actually means "after deducting something."
And the "something" we are deducting here is liabilities.
This definition actually comes from the basic accounting equation:
You see, if we swapped around the equation to make owner's equity the subject, we get the following:OWNER'S EQUITY = ASSETS - LIABILITIES
And that's exactly what net asset value
There are a few more synonyms for owner's equity, usually used more when talking about a company:
- Net worth
- Shareholder's equity
- Stockholder's equity
Shareholders and stockholders are the same thing and refer to the individual owners of shares (small amounts) of a company.
Okay, that's it for synonyms for owner's equity.
Are there any more synonyms that I left out? If so, please add this in a comment further below.
Thanks for reading!
Founder of Accounting Basics for Students Related Questions & Tutorials:Return to the full tutorial: What is Owners Equity?