Share capital refers to the assets remaining in the business after all liabilities have been paid off.
This figure is calculated by subtracting total liabilities from total assets; alternatively, it can be calculated by taking the sum of share capital and retained earnings minus treasury shares.
This indicator is often used by analysts and investors to determine the overall financial health of a company.
If equity is positive, then the company has enough assets to cover its liabilities.
Negative net worth may indicate impending bankruptcy.