Information > Financial Terms > This page

Source: Encyclopedia of Banking & Finance (9h Edition) by Charles J Woelfel
(We recommend this as work of authority.)

This term has three meanings:

1.  In Anglo-American legal parlance, the administration of justice, not through the inflexible   procedures of the law courts, but through the principles of equitable justice developed by   Chancery.  Thus there are Courts of Law and Courts of Equity and it is possible to bring an   action and obtain specific performance or other special relief through a Court of Equity   when an adequate remedy is not available in a Court of Law.

2.  In accounting and finance, net ownership, i.e., the extent of the owner's right in property   above all claims and liens against it expressed in money value.  Thus the equity of the   stockholders in a railroad corporation is represented by the value of the bond and note   holders, secure and unsecured, and all current indebtedness.

3.  In margin buying, the customer's equity is the present market value of his securities less the   debit balance in his account, i.e., the sum borrowed from the broker to enable the customer   to make the purchase.

Back to Information