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