Invested capital is simply Fixed assets + Working capital.
The formula you wrote is ROCE (return on capital employed)
When you take Debt + Equity the problem is alot of non core assets are also a part of this calculation. So for example take Bajaj Auto here if you see ROCE you will not understand the true return ratio of the business as alot of money is invested in mutual funds. In such businesses you see ROIC.
| Subscribe To Our Free Newsletter |
