Shareholders fund= common stock + preferred stock + retained earning + minority interest – treasury stock
Common stock: the value of money raised through the issuance of common stock.
Preferred stock: the value of money raised through the issuance of preferred stock issued by a company.
Retained earnings: the portion of a company’s profits that have been kept by the company and not paid out as dividends.
Minority interest: Minority interest is the portion of a company held by minority shareholders
Treasury stock: Treasury stock is the value of the stock that a company has bought back from its shareholders.
Once the value of each of these components has been determined, they can be added together to calculate the total shareholders’ fund.
For example, if a company has common stock worth $100,000, preferred stock worth $50,000, retained earnings of $75,000, minority interest of $2,000, and treasury stock worth $25,000, its equity capital would be calculated as follows:
Shareholders’ Fund = $100,000 + $50,000 + $75,000+ $2,000 – $25,000
Shareholders fund = $202,000
In this example, the company’s shareholders’ fund is $202,000, which indicates that it has $202,000 worth of assets that are owned by its shareholders.
Meena Khan