Stockholders Equity Formula

Stockholders Equity is calculated through different methods and Formulas. In the previous article, We already studied about “How To Calculate Stockholders Equity”. In this article, Stockholders Equity was calculated by preparing Statement of Stockholders Equity. If you don’t read this article, then you can study this article as well in order to get better understanding of this particular topic.

You may also be interested in “What is Owners’ Equity”

Stockholders Equity is the Rights of Shareholders who invested in the company’s business. Stockholders Equity is Calculated Through Accounting Equation Or Shares Capital, Reserves, Shares Premium, Retained Earnings, Net Income / Net Loss or Net Profit / Net Loss and other Dividends.

Mathematically, we can write as:

                                                         Rs.

Opening Stockholders Equity         XXX

Shares Capital                                XXX

Reserves                                        XXX

Shares Premium                            XXX

Retained Earnings                         XXX

Net Income / Net Loss                 (XXX)

Dividends                                      (XXX)

                                                 __________

Closing Stockholders Equity         XXX

                                                 __________

In case of Accounting Equation, Stockholders Equity is Equal to the difference between Assets And Liabilities as shown below:

Equity = Assets - Liabilities

We find the value of Assets and Liabilities from Balance Sheet or though Accounting Ratios in order to find out Equity or Stockholders Equity.

So, available Methods and Formulas are used to calculate Stockholders Equity.