Difference Wiki

Equity vs. Share: What's the Difference?

Edited by Huma Saeed || By Sumera Saeed || Updated on October 24, 2023
Equity represents ownership in a company; a share is a unit of that ownership.

Key Differences

Equity and share are terms often used interchangeably, but they have distinct meanings in the financial world. Equity broadly refers to the ownership value in an asset after liabilities have been subtracted. It encapsulates the net assets owned by shareholders. In contrast, a share is a specific unit of ownership in a corporation, representing a fraction of the company's total equity.
Sumera Saeed
Oct 24, 2023
When someone says they have equity in a company, it implies they have an ownership interest, which could be due to shares they hold, investments they've made, or other forms of ownership. This ownership interest reflects the value they'd claim after selling assets and settling debts. On the other hand, when one possesses a share, it signifies holding a tangible portion of a company's stock, which has quantifiable value on the stock market.
Sumera Saeed
Oct 24, 2023
It's crucial to note that equity can be derived from various sources and isn't confined to corporations alone. For instance, equity in real estate refers to the property's value minus any outstanding mortgage or debt. Shares are specific to corporations, representing standardized units of ownership, commonly traded on stock exchanges.
Sumera Saeed
Oct 24, 2023
While both equity and share deal with ownership, their scope is different. Equity is a broader term that applies to the total ownership value, including all shares, retained earnings, and additional paid-in capital. A share, however, is just a piece of that pie, representing a fraction of the company's total equity.
Sumera Saeed
Oct 24, 2023

Comparison Chart

Nature

Value of ownership
Unit of ownership
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Oct 24, 2023
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Representation

Ownership after liabilities
Fraction of company's stock
Sumera Saeed
Oct 24, 2023

Application

Can be in assets like real estate, businesses
Specific to corporations
Sumera Saeed
Oct 24, 2023

Quantifiability

Reflects overall value
Has a specific market value
Sumera Saeed
Oct 24, 2023

Scope

Encompasses all ownership assets and interests
Just a part of total equity
Aimie Carlson
Oct 24, 2023

Equity and Share Definitions

Equity

Net value after deducting liabilities.
After settling the debts, the company's equity was still robust.
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Oct 24, 2023
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Share

Entitlement to a portion of company profits.
Dividends are distributed based on the number of shares held.
Sumera Saeed
Oct 24, 2023

Equity

Capital raised from shareholders.
The firm increased its equity to finance the new project.
Harlon Moss
Oct 24, 2023

Share

Tradable security on the stock market.
The price of a share can fluctuate based on market conditions.
Aimie Carlson
Oct 24, 2023

Equity

Measure of ownership value in a business.
Investors look for companies with strong equity positions.
Sumera Saeed
Oct 24, 2023

Share

Unit of ownership in a corporation.
He bought 100 shares of Apple Inc.
Huma Saeed
Oct 24, 2023

Equity

Interest or rights in a particular asset.
He holds a 10% equity in that startup.
Aimie Carlson
Oct 24, 2023

Share

Evidence of investment in a corporation.
Holding shares in green energy companies is a sustainable investment.
Harlon Moss
Oct 24, 2023

Equity

Value of ownership in an asset.
Her equity in the house increased as property prices rose.
Huma Saeed
Oct 24, 2023

Share

Represents a fraction of a company's equity.
Each share represents a stake in the company's assets and earnings.
Sumera Saeed
Oct 24, 2023

Equity

The state or quality of being just and fair.
Sumera Saeed
Sep 22, 2019

Share

A part or portion belonging to, distributed to, contributed by, or owed by a person or group
The pirates argued over their shares of the treasure.
Sumera Saeed
Sep 22, 2019

FAQs

Do shares always have a monetary value?

Yes, shares represent a quantifiable stake in a company and have market value.
Sumera Saeed
Oct 24, 2023

Is equity always positive?

No, negative equity occurs when liabilities exceed the asset's value.
Harlon Moss
Oct 24, 2023

How is a share different from equity?

A share is a specific unit of ownership in a corporation, while equity represents the total ownership value.
Huma Saeed
Oct 24, 2023

Can equity exist without shares?

Yes, equity can be in assets like real estate, not just corporations.
Sumera Saeed
Oct 24, 2023

What does equity refer to in finance?

Equity refers to the ownership value in an asset after deducting liabilities.
Sumera Saeed
Oct 24, 2023

How are dividends related to shares?

Dividends are paid to shareholders based on the number of shares they hold.
Sumera Saeed
Oct 24, 2023

Can equity change over time?

Yes, equity can fluctuate based on asset values and outstanding liabilities.
Sumera Saeed
Oct 24, 2023

Can equity be negative in real estate?

Yes, if a property's mortgage exceeds its market value, it results in negative equity.
Sumera Saeed
Oct 24, 2023

How can one increase equity in an asset?

Increasing the asset's value or reducing associated liabilities can boost equity.
Sara Rehman
Oct 24, 2023

Is equity tangible?

While equity represents value, it's a conceptual measure and not a physical entity.
Janet White
Oct 24, 2023

How is equity calculated for businesses?

Business equity is calculated as total assets minus total liabilities.
Janet White
Oct 24, 2023

How does raising capital affect equity?

Raising capital can dilute existing equity if done by issuing more shares.
Sumera Saeed
Oct 24, 2023

Are all shares equal in value?

Not always. Companies can issue different classes of shares with varying rights and values.
Sumera Saeed
Oct 24, 2023

Are shares a type of equity?

Shares are units representing a portion of a company's total equity.
Sumera Saeed
Oct 24, 2023

Can one sell their shares anytime?

Shares traded on stock exchanges can be sold during trading hours, barring any restrictions.
Sumera Saeed
Oct 24, 2023

Are shares and stock the same?

"Stock" refers to the overall ownership in a company, while "shares" are the units of that ownership.
Janet White
Oct 24, 2023

Does having more shares mean higher equity?

Holding more shares increases one's proportionate ownership in a company's equity.
Sumera Saeed
Oct 24, 2023

What denotes ownership in a corporation?

Holding shares in a corporation signifies ownership.
Sumera Saeed
Oct 24, 2023

Do shares give voting rights?

Typically, shares grant voting rights, but it depends on the share class and company bylaws.
Janet White
Oct 24, 2023

Is equity synonymous with net worth?

In many contexts, equity and net worth are used interchangeably, but their calculation might differ.
Harlon Moss
Oct 24, 2023
About Author
Written by
Sumera Saeed
Sumera is an experienced content writer and editor with a niche in comparative analysis. At Diffeence Wiki, she crafts clear and unbiased comparisons to guide readers in making informed decisions. With a dedication to thorough research and quality, Sumera's work stands out in the digital realm. Off the clock, she enjoys reading and exploring diverse cultures.
Edited by
Huma Saeed
Huma is a renowned researcher acclaimed for her innovative work in Difference Wiki. Her dedication has led to key breakthroughs, establishing her prominence in academia. Her contributions continually inspire and guide her field.

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