In accounting, which term describes the owner's stake in the company?

The term that describes the owner's stake in the company is equity. Equity represents the residual interest in the assets of a business after deducting liabilities. In simpler terms, it is what the owners have left after all debts and obligations of the company have been satisfied.

In a business context, equity can take various forms, such as common stock, preferred stock, and retained earnings. It reflects the ownership value and indicates how much of the company is owned by the shareholders after accounting for all outstanding debts. This makes equity a crucial part of the balance sheet, highlighting the financial health and capital structure of a business.

Understanding equity is essential for evaluating the financial performance and stability of a company, as it gives insight into the value that shareholders would receive if the business were to liquidate its assets and pay off its obligations.