Increasing penetration of distributed resources have enabled the development of the microgrid concept. Similar to traditional generators, microgrids can participate in the energy market to achieve technical, economical and environmental benefits. In order to facilitate the participation in energy markets, microgrid operators need to be aware of the full capability of the microgrids. This paper presents a systematic approach for developing a capability chart for a grid-tied microgrid which represents the active and reactive power capability at the grid supply point. Capability charts have been developed for two different microgrids and the impacts of different modelling aspects have been analysed under several scenarios. Furthermore, operating points of the capability charts have been verified using time-domain simulations.