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Day 26

Intro to Shareholders’ Equity

Watch the video and scroll down for your homework.

Your Homework

1. Try explain to a friend or family member what liabilities, shareholders' equity and assets mean and how they are related. Tip: use the house analogy!

2. If Meta's Assets is $185,727M and its Liabilities is $60,014M, What is Meta's Shareholders' Equity?

Answers

1.    Think of shareholders equity like the equity in your home. You have an asset, which is the house. You have a liability, which is the mortgage, the money that you owe the bank. And when you subtract the mortgage from the value of your house, that's your equity.

2. $125,713M ($185,727M - $60,014M)

Remember the Balance Sheet Equation: Assets = Liabilities + Shareholders' Equity

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