What does equity (EV) mean?

"Equity (EV)" is the part of a company's assets that is not financed with third-party funds (by debts). It represents the capital contributed by the owners to the company and on which there is no repayment obligation, in contrast to external capital.

The equity can increase through the issuing of new shares or making a profit, and decrease through the purchase of own shares, losses, or distributions to shareholders (dividend). In sole proprietorships, the equity is affected by private withdrawals and contributions.

The equity is considered the owners' claim on the company's assets and is therefore also referred to as 'permanent capital', as there is no obligation to repay.