What Is Equity in a Dental Practice?
Equity is the portion of a dental practice that the owner(s) truly own — after subtracting all debts and liabilities from the total value of the business.
In accounting terms:
Equity = Total Assets – Total Liabilities
For dental practices, this includes your tangible assets (equipment, cash, property) and intangible value (goodwill, brand, patient base), minus loans, lease obligations, and other liabilities.
Why Equity Matters for Dental Practice Owners
Equity is what you build.
It’s the value you own outright — and what buyers, lenders, or investors assess when determining:
- Sale value
- Exit readiness
- Loan eligibility
- Partnership shares
Example:
Your practice is valued at £1.1M.
You have £380K in loans, equipment finance, and tax liabilities.
Your equity = £720K — the portion you own.
If you brought on a partner and sold 25%, you’d release ~£180K (plus goodwill uplift).
Types of Equity in Dental Practices
| Type | Description |
| Owner’s Equity | What the principal dentist owns after liabilities |
| Partner Equity | Shareholding or percentage held by additional directors/owners |
| Sweat Equity | Non-cash ownership (e.g. a clinical partner who buys in over time) |
| Retained Equity | Value reinvested instead of taken out as dividends |
| Shareholder Equity | Company’s net worth from an accounting perspective |
DentPulse tracks equity shifts automatically as profits, assets, or liabilities change.
How DentPulse Tracks and Uses Equity Data
| Feature | Function |
| Balance Sheet Engine | Calculates real-time equity based on assets vs. liabilities |
| Exit Planning Module | Shows how improving EBITDA increases equity value |
| Equity Dilution Alerts | Flags when drawing or debt erodes equity position |
| Partner Scenario Modeller | Tests equity share options for buy-ins or sell-outs |
| Valuation Uplift Estimator | Models how strategic improvements increase equity for exit |
DentPulse brings your equity position out of the year-end black box — and into live visibility.
DentPulse Tip™
Equity is your scoreboard.
But the right decisions today decide your score.Whether you’re growing, selling, or staying, DentPulse tracks and strengthens your equity — one margin decision at a time.
Related Glossary Terms
- Balance Sheet – Where equity is reported
- EBITDA – Drives equity uplift in practice valuations
- Valuation Multiple – Applied to EBITDA to calculate equity value
- Profit Retention – Increases equity when earnings stay in the business
- Debt-to-Equity Ratio – Used to assess leverage and financial stability
Glossary Summary Table
| Term | Meaning |
| Equity | The ownership value in a dental practice after subtracting liabilities from total assets |
| Calculation | Total Assets – Total Liabilities |
| Strategic Role | Determines business value, exit potential, and financial control |
| DentPulse Advantage | Tracks equity live, models scenarios, and links to valuation + profit tools |
