Capital employed

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Updated: Aug 20, 2021

An accounting term difficult to define but frequently used in published accounts. As there is no agreement as to how it should be calculated, the method of arriving at the figure varies considerably. It is generally taken to be the net assets. Capital employed from the point of view of the analyst is the total capital used in a business for the acquisition of profits. It may be thought of as the ordinary share capital and reserves or on the other hand as total assets, depending on a point of view.

Reference: The Penguin Business Dictionary, 3rd edt.



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