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Capital employed calculator

Capital employed — the total capital a business uses to generate profit — by any of the three standard methods: total assets minus current liabilities, non-current assets plus working capital, or equity plus non-current liabilities. Add operating profit (EBIT) and it also returns the ROCE.

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Need Capital employed, ROCE? The Capital employed calculator derives it from Method, Total assets, Current liabilities, Non-current (fixed) assets, Current assets, Shareholders' equity, Non-current liabilities, Operating profit / EBIT (optional) in one step. For instance, with Method = Total assets − current liabilities, Total assets = $500,000.00, Current liabilities = $100,000.00, Non-current (fixed) assets = $350,000.00, Current assets = $150,000.00, Shareholders' equity = $300,000.00, Non-current liabilities = $100,000.00 and Operating profit / EBIT (optional) = $60,000.00 it returns Capital employed = $400,000.00 and ROCE = 15%.

How to use it

  1. Enter your values: Method, Total assets, Current liabilities, Non-current (fixed) assets, Current assets, Shareholders' equity, Non-current liabilities, Operating profit / EBIT (optional).
  2. Read the result instantly: Capital employed, ROCE.

Frequently asked questions

What does the Capital employed calculator actually compute?

It takes Method, Total assets, Current liabilities, Non-current (fixed) assets, Current assets, Shareholders' equity, Non-current liabilities and Operating profit / EBIT (optional) and derives Capital employed and ROCE from them. The calculation is live as you type, so the result updates on every change.

What information do I need to provide?

8 values: Method, Total assets ($), Current liabilities ($), Non-current (fixed) assets ($), Current assets ($), Shareholders' equity ($), Non-current liabilities ($) and Operating profit / EBIT (optional) ($). Nothing else is required — no account, no file upload.

Can you show a worked example?

With Method = Total assets − current liabilities, Total assets = $500,000.00, Current liabilities = $100,000.00, Non-current (fixed) assets = $350,000.00, Current assets = $150,000.00, Shareholders' equity = $300,000.00, Non-current liabilities = $100,000.00 and Operating profit / EBIT (optional) = $60,000.00, the calculator returns Capital employed = $400,000.00 and ROCE = 15%. Those figures come from running this exact tool, so you can reproduce them by entering the same values.

What happens if I enter larger values?

It moves a lot. Using Method = Non-current assets + working capital, Total assets = $1,000,000.00, Current liabilities = $200,000.00, Non-current (fixed) assets = $700,000.00, Current assets = $300,000.00, Shareholders' equity = $600,000.00, Non-current liabilities = $200,000.00 and Operating profit / EBIT (optional) = $120,000.00 instead, Capital employed goes from $400,000.00 to $800,000.00 — which is why it is worth testing a few scenarios rather than trusting a single figure.

Which “Method” option should I choose?

You can pick between « Total assets − current liabilities », « Non-current assets + working capital » and « Equity + non-current liabilities ». Each one changes what the calculator works out, so switch and compare — the default is « Total assets − current liabilities ».

What does it give for smaller values?

Scaled down to Method = Total assets − current liabilities, Total assets = $250,000.00, Current liabilities = $50,000.00, Non-current (fixed) assets = $175,000.00, Current assets = $75,000.00, Shareholders' equity = $150,000.00, Non-current liabilities = $50,000.00 and Operating profit / EBIT (optional) = $30,000.00, Capital employed comes out at $200,000.00. The relationship is worth checking at both ends before you rely on a single result.

When would I actually use this?

Running the week: issuing an invoice or a quote, knowing what is in stock and what to reorder, and seeing whether cash covers what is due.

What is the most common mistake?

Reading profit as cash. A profitable month with sixty-day payment terms can still leave the account empty — the two numbers answer different questions.

What is the difference between the Capital employed calculator and the Working capital calculator?

This one returns Capital employed and ROCE; the Working capital calculator returns Working capital and Working-capital ratio. That is the whole difference — open the one whose figure you need.

Is there a tool for the next step?

Current ratio calculator is the closest one after this: Compute the current ratio from current assets and current liabilities.

Further reading

All guides →
ExplainerReturn on Assets: What the Ratio Says About a Business, and What It HidesReturn on assets, return on net assets and return on capital employed are one family with two moving parts. On the same balance sheet they read 8.3%, 10.2% and 15.6% — and the two steps between them are exactly the two decisions you are making.ExplainerAsset Turnover: Diagnosing Capital That Is AsleepNet sales divided by net fixed assets is one of the easiest ratios to compute and one of the least comparable. The same retailer scored 10× before the lease standard and 1.39× after it — same shops, same sales, same year.ExplainerFixed-Charge Cover: the Ratio a Landlord or a Lender Looks AtThe same company, the same year, reads 1.02×, 1.52× or 2.56× depending on where rent is put and whether principal is grossed up for tax. Two of those pass a 1.25 covenant and one does not.ComparisonInterest Coverage and the Ratios a Lender Actually TestsA loan agreement's covenants are the ratios that can put a solvent, profitable company into default. Interest coverage, times interest earned and DSCR are not three measures — and the one that adds principal repayment is the one that bites.ComparisonCurrent Ratio vs Quick Ratio, and What Neither Tells YouThe quick ratio removes inventory because inventory is the current asset that may not convert. Two companies with an identical current ratio can be five times apart on the quick ratio — and both measures are still blind to the one thing that actually stops a company paying: timing.GuideBorrowing for the Business: What the Bank Looks At Before the RateThe coverage ratio is the gate, the guarantee is the second price and the rate is an output. On a 400,000 loan, cutting the rate by a full point moves the coverage ratio by 0.018 — while two extra years of term move it by 0.216. The whole negotiation is in the wrong place.