Capital Employed Calculator


Capital Employed Calculator is a tool that evaluates all the assets employed in a business

Capital Employed:
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What does Capital Employed mean?
Capital Employed is the total amount of investment made for running the business. The term “Capital Employed” has a wider meaning and includes funds coming from both the owners and lenders, i.e., it covers both equity and debt.
Formula
Capital Employed = Fixed Assets + Non-current Investments + Current Assets – Current Liabilities
Example

A company’s balance sheet indicates the following:-

Equity and Liabilities

  1. Shareholder’s Funds
    1. Share Capital: $400000
    2. Reserves and Surplus: $100000
  2. Non-Current Liabilities
    1. Long-term Borrowings: $150000
  3. Current Liabilities: $50000
Total: $700000

Assets

  1. Non-Current Assets
    1. Fixed Assets: $400000
    2. Non-current Investments: $100000
  2. Current Assets: $200000
Total: $700000

According to the formula, Capital Employed is:-

  • = 400000 + 100000 + 200000 - 50000
  • = $650000
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