What do you mean by the term Equity
What do you mean by the term Equity. Briefly explain it.
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Equity: In finance, equity signifies the owner’s claim in business. This can state as well the capital of owner. It’s another name is owner’s equity. The owner in small business might be individual and can do trade with his family members. At that time, his invested money in industry will be his equity however when he has gotten secured loan from exterior, then total equity will classify into two parts one is owner’s equity and the other is creditor’s equity. Due to his business has limitless liability, therefore his own equity can be employed for payment of secured loan in situation of insolvency.
Liabilities mean the amount which the firm owes to the outsiders. Liabilities are of two types: -Long term liabilities & Short term liabilities. Examples of long term liabilities are long terms loans, bonds etc. & examples of short term liabil
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