Capital employed - help please!

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Please help! I am having a total mental block and cannot remember what is included in the 'capital employed' bit of 'Return on Captial Employed' .<BR><BR>I really shouldn't be - as passed PEV/PCR last time - but just can't remember and I have my CMCC simulation tomorrow - aarrgghh!!!<BR><BR>Thanks guys,<BR><BR>A

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Capital employed - help please!

    Hi there<BR><BR>Capital employed usually comprises share and loan capital together with any proifts already retained in the business.<BR>Hope it can help you.<BR><BR>chaoliss
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Capital employed - help please!

    Oh! I thought it was either current & fixed assests less liabilites or current assets less current liabilities or something.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Capital employed - help please!

    Hi there<BR><BR>Working capital 's caculation is what you have thought. Current assest less current liability. <BR>If possible can you give more information about your question ? maybe in different context my understanding is not right.<BR>Sorry for confusing you<BR><BR>chaoliss
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Capital employed - help please!

    Hi there<BR><BR>How about this answer?<BR>FIXED ASSETS PLUS THE NET CURRENT ASSETS
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Capital employed - help please!

    Oh yes - I think that's it. Thanks guys!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Capital employed - help please!

    u shuld get the same answer both ways.<BR><BR>the concept is the money invested in the business to purchase assets (fixed) and for financing working capital that is net current assets

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