Net Capital Employed is mathematically equivalent to which of the following expressions?(A) Fixed Assets + Current Assets - Long-term liabilities(B) Non-current Assets + Current Assets - Current liabilities(C) Fixed Assets + Current Assets - Equity(D) Equity + Debt(E) Current Assets - Current liabilitiesChoose the correct answer from the options given below:
- A(A) and (B) only
- B(B) and (D) only
- C(C) and (D) only
- D(A) and (D) only
Solution & Step-by-step Explanation
Capital Employed represents the long-term funds invested in a business. It can be computed using two approaches:Liabilities/Financing Approach:
Assets Approach:
Hence, statement formulas (B) and (D) are correct.
Assets Approach:
Hence, statement formulas (B) and (D) are correct.