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what it is really means?
if Net assets = total assets – total liabilities
then what is this Capital = assets – liabilities means?
is that the same thing?I think they are the same or at least, related. Let me try and explain 🙂
These two equation are based on the Basic Accounting Equation:
Asset = Capital + Liabilities
It can be re-arranged as Capital = Asset – Liabilities
We also know that: Net Assets = Assets – Liablities
Hence we can say: Capital = Net Assets
Hope that helps 🙂
Yes, and capital is always equal to the net assets.
You should watch the free lecture that goes with Chapter 2 of the free Course Notes, where all of this is explained in detail.
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