Equity has different meanings depending on the context. Here are some definitions of equity from various sources:
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Finance: In finance, equity is an ownership interest in property that may be offset by debts or other liabilities. Equity is measured for accounting purposes by subtracting liabilities from the value of the assets owned. For example, if someone owns a car worth $24,000 and owes $10,000 on the loan used to buy the car, the difference of $14,000 is equity. Equity can apply to a single asset, such as a car or house, or to an entire business. A business that needs to start up or expand its operations can sell its equity in order to raise cash that does not have to be repaid on a set schedule).
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Education: In education, equity refers to fairness and justice and is distinguished from equality. Whereas equality means providing the same to all, equity means recognizing that we do not all start from the same place and must acknowledge and make adjustments to imbalances. The process is ongoing, requiring us to identify and overcome intentional and unintentional barriers arising from bias or systemic structures.
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Investing: In investing, equity is simply the value of an investors stake in a company. It is represented by the value of shares an investor owns. Stock ownership gives shareholders a share of ownership in companies with the expectation that the stock may earn dividends or can be resold with a capital gain. If the investment were to rise in value, the equity they could get for selling it potentially increases. It’s important to note that equity stakes rise or fall with the underlying value of the companys assets as well as other factors.
In summary, equity can refer to ownership interest in property, fairness and justice in education, or the value of an investors stake in a company.
