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Meaning of Word

Equity refers to fairness and justice, especially in the distribution of resources, rights, or treatment. It can also refer to ownership value in an asset, such as a company or property, minus any debts owed against it.

Definitions and Meaning in English

1. Fairness and justice in treatment or distribution: Equity involves ensuring that people are treated fairly and that resources are distributed in a way that considers individual needs and circumstances.
2. Ownership value in an asset: In finance, equity refers to the value of an ownership interest in a property, such as a home or business, after subtracting any liabilities (debts) associated with it.
3. A branch of law focusing on fairness: In legal terms, equity refers to a system of law that deals with fairness, justice, and conscience, distinct from common law.

History and Origin

The word “equity” comes from the Latin aequitas, meaning “fairness” or “equality.” It has been used in English since the 14th century to describe fairness and justice, particularly in the context of the law. Over time, the meaning expanded to include the concept of financial value, especially in reference to ownership.

Detailed Explanation

Equity has several meanings, depending on the context in which it is used:

• Social Equity: In social and political contexts, equity refers to the fair distribution of resources, opportunities, and privileges within a society. Unlike equality, which means treating everyone the same, equity acknowledges that different people or groups may need different kinds of support to reach an equal outcome. For example, in education, equity may involve providing extra resources to students from disadvantaged backgrounds to help them achieve the same outcomes as others.
• Financial Equity: In finance, equity refers to the difference between the value of an asset (like a house or a company) and any debts or liabilities associated with it. If a company has assets worth $1 million and debts of $400,000, its equity is $600,000. For individuals, home equity is the value of a home minus the remaining mortgage balance.
• Equity in Law: In legal terms, equity refers to a system of justice that aims to provide fairness when the strict rules of common law might not lead to just outcomes. It originated in England and was historically overseen by the Court of Chancery, which dealt with cases of fairness and conscience.

Example Sentences

1. The company’s equity value increased after it paid off a large portion of its debt.
2. Social equity is important in ensuring that everyone, regardless of their background, has access to the same opportunities.
3. The homeowner’s equity grew as the value of the house appreciated and the mortgage balance decreased.
4. The judge ruled in favor of equity, ensuring that the defendant received a fair and just resolution despite the technicalities of the law.
5. The non-profit organization is dedicated to promoting equity in healthcare by focusing on underserved communities.
6. The firm’s equity was at an all-time high after its successful product launch.
7. In some cases, equity might require additional support to help people overcome systemic barriers.
8. The equity of the project was not realized until all liabilities were accounted for.
9. They worked hard to build equity in the home before selling it for a profit.

Synonyms with Short Explanation

1. Fairness – Treating all people equally and justly, which is the essence of equity.
2. Justice – The principle of giving everyone their due, often linked to fairness and equity.
3. Ownership – Refers to the rights of an individual or entity over an asset, closely related to financial equity.
4. Value – The monetary worth of an asset, especially when referring to the equity in a property or company.
5. Impartiality – Treating all parties fairly without bias, akin to the concept of equity.

Related Words with Short Explanation

1. Equality – The state of being equal, especially in status, rights, or opportunities, though it differs from equity in that equity accounts for differences in need.
2. Assets – Resources or items of value owned by a person or company, relevant to the calculation of equity.
3. Liabilities – Debts or obligations that reduce the value of an asset, affecting the calculation of equity.
4. Dividend – A payment made by a company to its shareholders, related to the equity they hold in the company.
5. Capital – The wealth or financial assets used to start or maintain a business, also tied to the concept of equity in ownership.

More Matches with Short Explanation

1. Home Equity – The portion of a home’s value that is owned outright by the homeowner, calculated as the market value minus any mortgage debt.
2. Equity Fund – A type of mutual fund or investment fund that primarily invests in stocks or equity (ownership) of companies.
3. Equity Financing – Raising capital for a business by selling ownership stakes (equity) in the company, usually in the form of shares.
4. Private Equity – Investment in companies that are not publicly traded, where investors buy equity to gain control and influence.
5. Equity Share – A type of stock that represents ownership in a company and entitles the shareholder to a portion of its profits.

Antonyms

1. Inequality – The state of being unequal, often in terms of wealth, rights, or opportunities, the opposite of equity.
2. Unfairness – The lack of fairness, in contrast to equity’s emphasis on just and balanced treatment.
3. Debt – An obligation or liability, which reduces financial equity in an asset.
4. Disparity – A great difference or inequality, opposite to the balance that equity seeks to provide.
5. Bias – A tendency to favor one side over another, contrary to the impartial nature of equity.