Series 79 practice questioneasyFinancial Statement Analysis
A company reports total assets of $500 million and total liabilities of $300 million. What is the company's total stockholders' equity?
- A$800 million
- B$200 million✓ Correct answer
- C$300 million
- D$500 million
Explanation
Why B — $200 million
The fundamental accounting equation states that Assets = Liabilities + Stockholders' Equity. Therefore, Stockholders' Equity = $500M - $300M = $200M. This relationship must always hold true on a balance sheet and is a foundational concept for evaluating a company's financial position and capital structure.
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