Can i assume that invested capital = total asset?
makes sense to me… My boss@work also use the same approach
I think total assets (Total equity + total liabilities) > invested capital ( total equity + total debt), but sometimes you can ignore the difference depending on the purpose of your analysis.
The basic equation for invested capital is Total Liabilities and Equity - non-interest bearing debt. You’ll just have to take what the question gives you. if there is not mentions of non interest bearing debt like accounts payable or unearned revenue or the like… then lucky you.
Invested Capital = Net Fixed Assets + Net Working Capital OR = BV of Long term Debt + BV of Equity
Ok thanks guys thats clear
IMO Invested capial include ST interest-bearing debt as well. Can someone confirm this?