Owners' equity is the owners' stake: assets less liabilities.
What it is made of
Contributed capital — money the owners put in.
Retained earnings — profit the business kept rather than distributed.
Less distributions and draws — money taken back out.
It is a book figure, not a value
Equity is calculated from what the accounts record, and the accounts record what things cost, reduced by depreciation.
So a van bought five years ago may be carried near zero while still being worth a real amount, and goodwill built over a decade of trading is not on the books at all unless it was bought.
This is why equity and what a business would sell for are different numbers, usually by a wide margin. What a buyer would pay is business valuation.
Negative equity
Liabilities exceeding assets. It arises from accumulated losses, or from owners taking out more than the business earned.
It matters most to lenders, who read it through debt to equity.