A more thorough explanation:

Stockholders' equity, also known as owners' equity, is the total value of the owners' financial interests in a business entity. It includes the capital contributed by the owners and any retained earnings.

Owners' equity is calculated by subtracting the liabilities of a business entity from its assets. The resulting amount represents the residual claim of the owners on the business's assets.

For example, if a corporation has assets worth $1 million and liabilities worth $500,000, its owners' equity would be $500,000. This represents the amount of value that the owners have in the corporation's assets after all liabilities have been paid.

Another example would be a small business owned by a sole proprietor. If the business has assets worth $100,000 and liabilities worth $50,000, the owner's equity would be $50,000. This represents the amount of value that the owner has in the business's assets after all liabilities have been paid.

Overall, stockholders' equity is an important measure of a business's financial health and the value that its owners have in its assets.