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Shareholders' equity or net worth represents how much the owners of a company have invested in the business, either by investing in the business or by cumulative retaining earnings.

It includes, Common stock, preferred stock, retained earnings, additional paid-in capital, and the accumulated other comprehensive income.

The primary structure block of stockholders' equity is paid-in capital. Another major source of stockholders' equity is accumulated retained earnings. The principal source of Paid-in capital is Contributed Capital or Common stock, which addresses amounts received from stockholders in exchange for capital at par value and excess of par value.

Retained earnings are the profit that remained with a corporation after paying all its direct costs, indirect costs, income taxes, and declared dividends to the shareholders.