what the components of shareholder equity are
retained earnings are part of shareholder equity and are the percentage of net earnings that were not paid to shareholders as dividends think of retained earnings as savings since it represents a cumulative total of profits that have been saved and put aside or retained for future use retained earnings grow larger over time as the company continues to reinvest a portion of its income 2at some point the amount of accumulated retained earnings can exceed the amount of equity capital contributed by stockholders retained earnings are usually the largest component of stockholders equity for companies operating for many years treasury shares or stock not to be confused with u s treasury bills represent stock that the company has bought back from existing shareholders companies may do a repurchase when management cannot deploy all of the available equity capital in ways that might deliver the best returns shares bought back by companies become treasury shares and the dollar value is noted in an account called treasury stock a contra account to the accounts of investor capital and retained earnings companies can reissue treasury shares back to stockholders when companies need to raise money 3many view stockholders equity as representing a company s net assets its net value so to speak would be the amount shareholders would receive if the company liquidated all of its assets and repaid all of its debts example of shareholder equityas part of its 2023 annual report apple reported 73 812 billion of shareholder equity this value was made up of common stock and additional paid in capital of the 50 4 million shares authorized the company had issued roughly 15 5 million shares 4apple also has several other types of shareholder equity activity as of september 30 2023 the date listed on the company s 2023 annual report the company had an accumulated deficit of 214 million the company also reported an accumulated other comprehensive loss of 11 4 billion 4as part of apple s 2023 report the company listed 62 146 billion of shareholder equity this is up from 50 672 billion from on year prior 4other forms of equitythe concept of equity has applications beyond just evaluating companies we can more generally think of equity as a degree of ownership in any asset after subtracting all debts associated with that asset below are several common variations on equity private equity