Owner Equity is the portion of a business’s assets that belong to its owners. It is also referred to as shareholder equity or net worth, and it represents the total amount of money invested in the business by its owners plus any retained earnings from profits. As an organization earns income and accumulates retained earnings, the owner’s equity increases. In contrast, when expenses exceed revenue, owner’s equity decreases. Ultimately, owner’s equity is an important factor in determining the financial health of a business.