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Capital Employed:
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Background Information
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:-
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