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Net Capital

How do I calculate the net capital of my business?

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



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