Shareholders’ Equity represents monetary contributions from a company’s stock (equity) owners and from the course of its operations (Exhibit 6.23). Along with liabilities, Shareholders’ Equity forms another major source of funding for companies. Companies can choose to fund themselves through the sale of their shares of stock and through retained earnings, which they have accumulated over the course of their existence.
Preferred Stock | Stock that has special rights and takes priority over common stock |
Common Stock Par Value | Par value of units of ownership of a corporation |
Additional Paid-In Capital (APIC) | Represents capital received by a company when its shares are sold above their par value |
Treasury Stock | Common stock that had been issued and then reacquired (bought back) by a company |
Retained Earnings | Total amount of earnings of a company since its inception minus dividends and losses (if any) |
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