Financial interest in a property called equity
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malia
Apprentice
Joined: 22 Aug 2007
Posts: 6
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 Posted: 08/30/08 - 07:50 Post subject: |
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| I have got a question for you all that I am certain is going to sound silly to those who have got experience in the financial field. I don't. I am studying to be a teacher, so I hope you will understand. Could you explain to me what the financial interest in a property called equity entails? Thank you. |
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arnuad
Apprentice
Joined: 24 Feb 2008
Posts: 2
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| Posted: 09/14/08 - 02:56 Post subject: |
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| In strict accounting terms, they would say that ownership equity is the interest in assets that remains when you have paid off all liabilities. It is often used in the context of businesses, and is extremely useful when determining how assets should be disposed of in the case of bankruptcy or liquidation. |
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wendell
Apprentice
Joined: 18 Apr 2006
Posts: 3
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| Posted: 09/28/08 - 22:03 Post subject: |
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| For the guy above me - is it right that the definition you give "assets that remain when all liabilities have been paid off", is also referring to net worth? In other words, is equity in fact the same as net worth, but for a company rather than an individual? Please come back to me on that one. |
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