Capital Employed
Definition
The total funds a business uses to generate profit, generally equity plus long-term debt, or total assets less current liabilities. It is the base for return on capital employed.
Related Terms in Business Terms
Fixed Asset Register
A detailed record of a business's fixed assets — cost, location, purchase date, depreciation and net book value. It supports depreciation accounting, insurance and physical verification.
Cost Center
A part of a business to which costs are allocated but which does not directly generate revenue, such as administration or IT. Tracking costs by center supports budgeting and accountability.
Profit Center
A part of a business that is accountable for both its revenues and its costs, and therefore its profit, such as a product line or branch. It allows performance to be measured unit by unit.
Authorised Capital
The maximum amount of share capital a company is permitted to issue under its constitution. It sets a ceiling; the company may issue less, which becomes its issued capital.
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