The official business definition of Increase in Owner’s Equity is a rise in the net worth of an entity without raising funds from external sources. In other words, the equity of a business has increased when it gained profits or its assets increased in value without any external investments. This can happen when money is earned from sales, profits are reinvested into the business, investments or contributions are made to the company, or losses are reduced from previous periods. It’s an incredibly valuable financial indicator as it helps keep track of a company’s growth and performance throughout its years of operation.