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What's the difference between capital and owner's equity?

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Question added by AFTAB ALi , Accounts Officer , IBA Public School
Date Posted: 2016/01/13
Mohamed Yassin
by Mohamed Yassin , Group FP&A , Imdad Group

Owners equity is the contribution of the owners in the assets of the business represented by paid capital contributions, reserves and retained earnings.

Capital is a part of the owner's equity (Usually called Paid in Capital).

Unless you are looking for the working capital which measures the entity's short term financial health and calculated as follow:

Working Capital = Current Assets - Current Liabilities.

 

 

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