How to Calculate Capital Employed

Written by tom mcnulty
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How to Calculate Capital Employed
Finding a company's capital employed figure involves a simple calculation. (investing money image by dinostock from Fotolia.com)

Capital employed is the amount of money that is deployed or invested in a business to support its ongoing operations. There are several definitions of the term, but the most common involves subtracting a company's current liabilities from its total assets.

Skill level:
Moderate

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Things you need

  • Company financial statements

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Instructions

  1. 1

    Find the company's balance sheet in its financial statements.

  2. 2

    Look for the assets section in the balance sheet. It is usually the first section.

  3. 3

    Look for the "Total Assets" number at the bottom of the assets section. For example, if the company has £32 million in total assets, write that number down.

  4. 4

    Locate the liabilities section of the balance sheet. It is usually right after or below the assets section.

  5. 5

    Find the current liabilities section, which should come first.

  6. 6

    Find the "Total Current Liabilities" number and write it down. For example, it might be £13 million.

  7. 7

    Subtract £13 million from £32 million to get £19 million. This means that £19 million is the capital employed at this particular company.

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