Final answer:
Shareholders' equity represents the net worth of a company and is calculated as the difference between total assets and total liabilities. It includes the initial investment made by shareholders and any retained profits. It is reported on the balance sheet of a company's financial statement.
Step-by-step explanation:
In the context of a company's financial statement, shareholders' equity represents the net worth of the company and is calculated as the difference between total assets and total liabilities. It includes the initial investment made by shareholders and any profits that have been retained in the company. Shareholders' equity can be reported on the balance sheet of a company's financial statement. It is typically categorized into different components, such as common stock, retained earnings, and additional paid-in capital.