The Ending Equity Calculator helps business owners, accountants, and financial analysts calculate the final equity balance in a business at the end of a given period. This tool is essential for understanding how much ownership value remains after accounting for profits, investments, and withdrawals.
Ending equity reflects the health and profitability of a business. You can use it to assess business growth, prepare financial statements, and support tax reporting.
This tool belongs to the Business Accounting and Finance Calculators category.
Formula of Ending Equity Calculator
Ending Equity = Beginning Equity + Owner Contributions + Net Income − Owner Withdrawals
Detailed Breakdown:
- Beginning Equity
This is the owner’s equity balance at the start of the period. It includes retained earnings or leftover equity from the prior accounting period. - Owner Contributions
Capital, cash, or other assets added to the business during the period. - Net Income
This is calculated by subtracting total expenses from total revenues.
Net Income = Total Revenue − Total Expenses - Owner Withdrawals
Funds or resources the owner took out of the business for personal use. These reduce the total equity.
The result tells you how much value the owner retains in the business after all operational and financial activities during the period.
Common Reference Table
| Term | Meaning |
|---|---|
| Beginning Equity | Value of equity at the start of the year/quarter |
| Net Income | Revenue minus all business expenses |
| Owner Contributions | Capital or assets the owner adds during the period |
| Owner Withdrawals | Money or assets taken by the owner for personal use |
| Ending Equity | Final amount of owner's equity at the end of the accounting period |
Example of Ending Equity Calculator
Suppose a business starts the year with $50,000 in equity. The owner adds $10,000, earns a net income of $25,000, and withdraws $5,000 during the year.
Apply the formula:
Ending Equity = 50,000 + 10,000 + 25,000 − 5,000
Ending Equity = 80,000
So, the ending equity is $80,000. This means the owner’s stake in the business has increased by $30,000 over the period.
Most Common FAQs
It shows the actual value that belongs to the owner after all business activity.
Yes. If losses or withdrawals exceed income and contributions, equity can fall below zero.
Net income increases equity, while a net loss decreases it.