Reflect the total owner's equity of all shareholders, including the parent company and minority shareholders, and 100% of the shares held by shareholders.
That is, total owners' equity = total shareholders' equity of parent company+minority shareholders' equity.
Shareholders' equity includes paid-in share capital and retained earnings.
Shareholders' equity refers to the owner's equity (i.e. net asset value) or company capital of a joint-stock company.
Shareholders' equity is a very important financial indicator, which reflects the company's own capital.
When the shareholders' equity is less than zero, the company will be insolvent. At this time, the shareholders' rights and interests of the company disappeared. If bankruptcy liquidation is carried out, shareholders will get nothing.
On the contrary, the greater the amount of shareholders' equity, the stronger the company's strength.
The proportion of shareholders' equity should be moderate.
If the equity ratio is too small, it means that the enterprise is heavily in debt, which will easily weaken the company's ability to resist external shocks, while the equity ratio is too large, which means that the enterprise has not actively used financial leverage to expand its business scale.
The ratio of shareholders' equity, also known as the ratio of net assets, is the ratio of shareholders' equity to total assets, which reflects how many assets of the enterprise are invested by the owners.
It is worth mentioning that sometimes some companies lose money not because the ratio of shareholders' equity is too low, but because the industry is depressed. Such companies are more likely to turn losses into profits.
Retained income refers to the internal accumulation retained by enterprises from the profits realized over the years, including surplus reserves and undistributed profits. Surplus reserve refers to the accumulated funds extracted from net profit by enterprises in accordance with relevant regulations.
The surplus reserve of corporate enterprises includes statutory surplus reserve and arbitrary surplus reserve.
Statutory surplus reserve refers to the surplus reserve drawn by an enterprise from its net profit according to the prescribed proportion.
Arbitrary surplus reserve refers to the surplus reserve drawn by an enterprise according to the resolution of the shareholders' meeting or the shareholders' meeting.
After approval, the surplus reserve drawn by an enterprise can be used to make up losses, increase capital or distribute cash dividends or profits.
Undistributed profit refers to the realized net profit of an enterprise after making up losses, drawing surplus reserves and distributing profits to investors.
Compared with other parts of owners' equity, enterprises have greater autonomy in the use of undistributed profits.
It comes from the net profit realized by the enterprise's production and operation activities, including surplus reserve fund and undistributed profit, in which surplus reserve fund is the accumulated surplus with a specific purpose and undistributed profit is the accumulated surplus without a specific purpose.