BE in Financial Accounting

The business equation (BE) in accounting is a concept that is separate from the accounting equation, although the two have a link between them. The business equation is:
Profit (Loss) = Movement in assets - Capital introduced +Drawings
This is based on elements that affect the accounting equation (Assets = Capital + Liabilities)but is a distinct equation
For simplicity, the BE is represented as P = I + D - C, where P is profit; I is the increase in net assets; D is drawings/withdrawals and C represents capital introduced. The term "movement of assets" indicates that there can be a net increase or net decrease in assets of the business over the period. To determine this, the business' opening and closing asset positions must be known.
The difference between the business equation and accounting equation is the former denotes the changes that occur in capital during the period. Profit (loss), capital introduced, drawings are associated with capital (liability to the owner or owners). The movement of net assets corresponds with the difference in net assets at the start and end of the trading period. Recall that Assets - Liabilities = Net assets.
The purpose of the business equation is to calculate profit where no records of daily transactions are available. However, once the profit (loss) and two other variables are known, the business equation can be quite useful in calculating the other variables in the formula. Therefore:
a) Movement in assets = Profit (loss) + Capital introduced - Drawings
b) Capital introduced = Profit (loss) - Movement in assets - Drawings
c) Drawings = Profit (loss) - Movement of assets + Capital introduced
Instead of remembering all of the formulae, you merely have to transpose the rest of the business equation to make the unknown variable the subject of the formula.
For example, assume that, in one period, a business lost $10,000.00 and experienced a net decrease in assets of $100,000.00. During the period, the owner withdrew $5000.00 from the business.
The missing variable is the capital introduced. By substituting the known variables into the business equation, we get:
Capital introduced = (-$50000.00) - (-$100,000.00) - $5000.00 = (-$55,000.00) + $100,000.00
Therefore, the owner introduced capital to the tune of $45,000.00 during the trading period.