The equation of equity is as follows:
Owner Equity = Assets – liability
The owner or the sole proprietor of a business makes investments, earns some profit on it, and withdraws some money out of it for his personal use called drawings. We may write this transaction as follows:
Investment (capital) ± Profit or Loss – drawings = Owner’s Equity
J. BoomiNathan is a writer at SenseCentral who specializes in making tech easy to understand. He covers mobile apps, software, troubleshooting, and step-by-step tutorials designed for real people—not just experts. His articles blend clear explanations with practical tips so readers can solve problems faster and make smarter digital choices. He enjoys breaking down complicated tools into simple, usable steps.
