Definition for : Capital employed

Capital employed is the sum of a company's Fixed assets and its Working capital (i.e. Operating working capital and Non-operating working capital). It is therefore equal to the sum of the net amounts devoted by a business to the operating cycle and Investment cycle. Also known as Operating assets. Capital employed is financed by two main types of funds, Shareholders' equity and Net debt, sometimes regrouped under the heading of Invested capital.

(See Chapters Chapter 4 Capital employed and invested capital and Chapter 13 Return on capital employed and return on equity of the Vernimmen)

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