# Quick Total Capital Question

The Total Capital is listed as \$1,700,000. Can someone explain how to get this? Thanks! Cash 70,000 Accounts Payable 90,000 Accounts Receivable 140,000 Deferred Tax Liability 100,000 Inventory 460,000 Long-term Debt 520,000 Property, Plant & Equip. 1,200,000 Common Stock 600,000 Total Assets 1,870,000 Retained Earnings 360,000 ----------------------------------- Total Liabilities & Equity 1,870,000 Earnings Before Interest and Taxes 280,000 Interest Expense 60,000 Income Tax Expense 75,000 Net Income 145,000 LIFO Reserve at Jan. 1 185,000 LIFO Reserve at Dec. 31 250,000

Total capital includes the company’s debt and shareholders’ equity, which includes common stock, preferred stock, minority interest and net debt. Don’t remember as it has been 2 years but I guess just deduct cash and deferred liability from Total Liabilities & Equity.

Thanks pupdawg!

Why does subtracting cash and deferred liability from total liab and equity make sense? I understand assets = L + E, but how would subtracting cash and deferred tax liability equate to total capital? I tried summing up debt and equity (in thousands): Liabilities: AP – 90 LT Debt – 520 Equity: CS – 600 RE – 360 NI – 145 Total:1715 I noticed the difference between interest and income tax expense is 15, didn’t think it made sense, but that’s the only thing I saw would work out mathematically. Thanks for the help.