Total Equity refers to the net assets owned by shareholders.
Total Equity = Preferred Stock + Common Stock + Capital Surplus + Retained Earnings
Total Equity and Total Liabilities are the two components for Total Assets:
= Total Shareholders Equity + Total Liability
= Total Current Assets + Total Long Term Assets
Total equity is used to calculate book value per share:
Book Value per Share = (Total Equity-Preferred Stocks)/ Total Shares Outstanding.
The ratio of a companys debt over equity can be used to measure how leveraged this company is:
Debt-to-Equity = (Long Term Debt + Current Portion of Long Term Debt)/Total Equity.