The value of ownership in an asset minus any debt owed against it.
Equity represents ownership value—what you own after subtracting what you owe. In real estate, home equity is the market value of your home minus the mortgage balance; if your home is worth $300,000 and you owe $200,000, you have $100,000 in equity. In business, equity is ownership interest in a company—shareholders own equity claims on the company's assets and profits. On a balance sheet, equity (also called net worth or shareholders' equity) is calculated as assets minus liabilities. Building equity in a home involves paying down the mortgage; building equity in a business involves profitability and reinvested earnings. Equity is the foundation of personal net worth and a key measure of financial progress.