### How to Calculate Shareholder Funds

Shareholder funds (also known as stockholders' equity or shareholders' capital) represent the amount of capital invested by stockholders into the company, including equity share capital, preference share capital, surplus and all reserves.

Calculation:
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

Example 2:
KK Company has an issued share capital of 1,000,000 ordinary shares of \$1 each and 600,000 10% preference shares of \$0.50 each. The share premium is \$300,000.
Then,
Shareholder funds = Share capital + Reserves = 1,000,000 * \$1 + 600,000 * \$0.50 + \$300,000 = \$1,600,000

* Next: How to Calculate Share Capital