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Does the shareholders equity represent the savings a company has accumulated through the years?

Office Management Accounting Financial Accounting Financials Finance
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Question added by Divyesh Patel , Assistant Professional Officer- Treasury , City Of Cape Town
Date Posted: 2014/03/16
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Divyesh Patel
by Divyesh Patel , Assistant Professional Officer- Treasury , City Of Cape Town

No. The number which appears in the Shareholder’s Equity of a company that was founded several years ago is just a number which balances the balance sheet. It does not have a clear economic meaning.

 

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