What Is Invested Capital?

Investment capital refers to the book value of all funds invested by the investor in the operation of the enterprise, including debt capital and equity capital. Among them, debt capital refers to short-term and long-term loans provided by creditors, excluding commercial credit liabilities such as accounts payable, documents payable, and other payables. Investment capital is also the net value of a company's total assets minus its commercial credit debt.

Investment capital

The boring accounting term of return on invested capital has become an issue of high public attention. In this regard, in the previous three months, investors active in Asian capital markets,

Investment capital = equity capital investment + debt capital investment = shareholder equity + all interest debt

= Working capital + long-term net asset value-long-term interest-free liabilities