PDSnet Glossary

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Definition

<p style="text-align: justify;">The funds which the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">ordinary shareholders</span> have in a <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">company</span>. This can normally be calculated by subtracting the company's <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">liabilities</span> from its <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">assets</span>. <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">Shareholders</span>' funds is a critical element of the company's <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">gearing</span>. An unhealthy situation would be where outsiders like <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">bank</span>s have more money in the business than the shareholders - or where the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">interest</span> paid on loans was greater than one third of <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">profits</span>.</p>