Series 28: Sample Net Capital Calculation

Taken from our Series 28 Online Guide

Sample Net Capital Calculation

XYZ Brokerage, Inc., carries the accounts of many customers and has custody over their assets. The following is selected balance sheet information from XYZ Brokerage.

Balance Sheet*

Assets

Cash

$100,000

Exchange membership fee

$40,000

Customer debit balances

$280,000

Aged Fails to Deliver—marked to the market

$10,000

Securities Inventory—marked to the market

$200,000

Prepaid expenses

$70,000

Total Assets

$700,000

Liabilities

Accounts payable

$25,000

Customer credit balances

$175,000

Stock loaned

$45,000

Bank loans

$130,000

Subordinated loans

$250,000

Total Liabilities

$625,000

*Unrealized profits and losses are assumed to be imbedded in the balance sheet equation

Step 1: Calculate net worth by subtracting total liabilities from total assets.

$700,000 – $625,000 = $75,000

Step 2: Add the

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