Net Capital
How do I calculate the net capital of my business?
By Nicci Courtney-Clarke · Updated
Net capital is the value of your business after subtracting what you owe (liabilities) from what you own (assets). It shows your business’s financial strength.
Example:
Let’s say you run a small clothing boutique in Cape Town. You have:
- Stock worth R50 000
- Equipment (like a card machine and sewing machine) worth R20 000
- Cash in your business bank account: R10 000
Total assets = R80 000
Now, you also owe:
- A supplier: R30 000
- A short-term business loan: R10 000
Total liabilities = R40 000
Net capital = R80 000 – R40 000 = -R40 000