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Stockholders

' equity = Total assets -

Total liabilities


Or, = Share capital + Reserves


(Note that: Reserves include share premium, retained profits, general reserve, etc.)


Example 1:


UOL Company has the following information:


Buildings $500,000


Motor vehicles $200,000


Stock $20,000


Debtors $35,000


Cash $5,000


Creditors $45,000


Bank loan $85,000



Then,


Total assets = 500,000 + 200,000 + 20,000 + 35,000 + 5,000 = $760,000


Total liabilities

= 45,000 + 85,000 = $130,000


Shareholder funds = 760,000 - 130,000 = $630,000

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12y ago

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