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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 →
ExplainerGrowing a Business That Earns Less Than Its Capital Costs5 million of operating profit on 20 million of capital employed is a 25 % return. Against a cost of capital of 8 % that is a spread of 17 points; at 6 % it would be a spread of −2, and every extra euro invested would destroy value.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.ExplainerFifty Thousand of Working Capital, and None of It SpendableCurrent assets of 150,000 less current liabilities of 100,000 gives working capital of 50,000 and a ratio of 1.5. Whether that is comfortable depends on what the 150,000 is made of.ExplainerOne Balance Sheet, Three Ratios, and Only One of Them Has a Ceiling500,000 of liabilities against 1,200,000 of assets is 41.7 % debt, 58.3 % equity and a debt-to-equity of 0.71. The third one runs to infinity as the equity vanishes; the first cannot pass 100 %.ExplainerCovering Your Interest Ten Times Says Nothing About Repaying the LoanEBIT of 500,000 against interest of 50,000 is a cover of 10×. Refinance at a rate 3.6 times higher and the same business covers 2.78× — and neither figure has looked at the principal.