# How to Calculate Total Equity Investment of Stockholders

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The total equity investment of stockholders in a corporation may be referred to as the net worth of the business. Stockholders’ equity can be found on a corporation’s balance sheet. Stockholders’ equity can be calculated by adding a company’s assets and subtracting the obligations placed on the business by creditors and lenders. A corporation’s stockholders’ equity account may increase when investors put more cash in the business and by reinvesting the company’s net income.

Add all of the corporation’s assets. An asset is a resource controlled by the business that holds a future economic value. Assets consist of items like property, equipment, land, cash and accounts receivable. For instance, a company that has \$10,000 cash, \$7,000 in accounts receivable, \$5,000 in equipment and \$1,000 in supplies has total assets of \$23,000.

Compute all of the corporation’s liabilities. A liability is an obligation placed on a corporation’s resources. Liabilities consist of items like accounts and notes payable, unearned revenue, wages payable, taxes payable and interest payable. Let’s assume a corporation has \$6,000 in accounts payable, \$5,000 in notes payable, unearned revenue of \$3,500 and taxes payable of \$1,000. In this case, the corporation’s total liabilities equal \$15,500.

Subtract the corporation’s total liabilities from total assets. For instance, a company that has assets totaling \$50,000 and liabilities of \$31,000 has stockholders’ equity of \$19,000.