Equity is a measure of the difference between the value of an asset, and the debt that is attached to it. Essentially, it’s a way to gauge how much you can buy an asset for and still have funds left over.
To illustrate, let’s think of it in terms of a car. If you have $10,000 and you buy a car for $12,000, you could say that you are ‘$2,000 in the red’.
