An owner's financial interest in a business is referred to as what?

The term that describes an owner's financial interest in a business is "equity." Equity represents the ownership value in an asset after all liabilities associated with that asset are deducted. In the context of a business, equity reflects the residual interest of the owners in the assets of the company once all debts and obligations have been settled.

Equity can take various forms, such as stock in a corporation or ownership in a partnership. It is essential in understanding the net worth of a business and how much of the enterprise is actually owned by the shareholders or partners.

The other terms provided relate to broader financial concepts. "Capital" typically refers to the financial resources that a business uses in its operations, which can include both equity and debt financing. "Assets" represent resources owned by the business that have value, while "liabilities" are obligations that the business owes to others. Understanding these distinctions clarifies why equity is the correct answer to the question regarding an owner's financial interest in a business.