The Total Liabilities and Owner’s Equity Formula is a simple yet insightful equation used to determine the overall financial health of a business. It calculates the amount of liabilities, such as debts, plus the equity held by the owners, resulting in the total sum of shareholder investment. This formula can be written mathematically as: Total Liabilities and Owner’s Equity = Liabilities + Owner’s Equity. By providing an easy-to-understand snapshot of a business’ financials, this formula is essential for entrepreneurs looking to get a handle on their financial situation.