What is Stockholder Equity?
Cfefinances
Stockholders' Equity, also called Shareholders' Equity, has two main components: Contributed Capital (money invested directly by shareholders) and Retained Earnings (profits reinvested in the business). It represents the owners' residual claim on the company's assets after liabilities have been paid.
Think about the owners' leftover claim after debts are paid. It's built from contributed capital plus retained earnings.