📚Stockholders' equity is the owners' right to the resources of a business, representing the net worth of the organization.
💰Equity is calculated as the difference between a company's assets and liabilities, indicating the portion of resources owned by the owners.
📈Contributed capital is the capital stockholders pay into the company, including the par value of shares and any additional amount.
💼Retained earnings include the undistributed net income earned by the corporation, which can be reinvested or used to pay off creditors.
📉Dividends decrease retained earnings, representing a distribution of the corporation's earnings to stockholders.