Term: ADJUSTED TOTAL EQUITY

This is also known as “adjusted shareholders’ equity” and refers to the total amount of money which the shareholders have in a business – the adjustment made is that it excludes any unrealised appreciation in investments. In other words, if the company owns shares in a listed company which have gone up, their increase in market value would be excluded. This figure is often compared to the amount of money which third parties (like banks) have in the business in order to arrive at the debt:equity ratio.

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