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Invested Capital VS Capital Employed

April 30, 2017

Invested Capital is used to calculate Economic Value Added (EVA) as either:

Invested Capital = Net Working Capital + Net Fixed Assets

Invested Capital = Book Value of Long Term Debt + Book Value of Equity

Capital Employed is used to calculate Return on Capital Employed (ROCE) as either:

Capital Employed = Shareholder’s Equity + Debt

Capital Employed = Total Assets – Current Liabilities

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One Comment
  1. There was a typo on this slide and on the original card, this is what happens when you study too much especially when tired. Oh well I caught it before the exam, but I often get Economic Value Added questions wrong so I keep working on them…

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