Owner's equity is the residual interest in the assets of a business after deducting all liabilities. In other words, it represents the ownership interest of the owner(s) in the business. Another name for owner's equity is "capital." This is because it represents the amount of money that the owner(s) have invested in the business, plus any profits that have been retained in the business over time. The term "capital" is often used interchangeably with "owner's equity" in financial statements and accounting reports.