Stockholders' equity is what would be left for the owners if the company sold everything it owns at the values on its books and paid off everything it owes. It is calculated as total assets minus total liabilities, and it is the same figure as book value, two names for one number.
Growing equity year after year is one signature of a compounding business, because profits the company keeps get added to this account and build on each other.
Its limit is that the books only capture what accounting can measure. For a business built on physical assets and money, such as factories, banks, insurers, and property firms, equity is a reasonable floor under what the company is worth. For a business whose value lives in brands, software, and people, equity misses most of what matters, and the company will be worth far more than this number suggests.