The total amount of money that was endowed into a company by the shareholders, bondholders and all other interested parties. Invested capital is often determined by adding the total debt and lease obligations to the amount of equity in the firm and then subtracting the non-operating cash and investments. Invested capital must be calculated, and there are multiple ways to calculate this figure. It will not be listed on the company's financial statement.
Companies must earn more than it costs them to use the invested capital provided by bondholders, shareholders and other financing sources, in order to earn an economic profit. Knowing a company's invested capital allows investors to use this metric to calculate measures of performance such as return on invested capital, economic value added and return on capital employed.
Investment dictionary. Academic. 2012.
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Invested Capital — represents the total cash investment that shareholders and debtholders have made in a company. There are two different but completely equivalent methods for calculating invested capital. The operating approach is calculated as:Invested capital =… … Wikipedia
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invested capital — index investment Burton s Legal Thesaurus. William C. Burton. 2006 … Law dictionary
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invested capital — amount of resources that have been invested in a business by its owners … English contemporary dictionary
invested capital — Literally, the money or property put into an enterprise. For the purpose of the wartime federal revenue acts, actual cash paid in, or the actual cash value of tangible property paid in, other than cash, for stock or shares in the corporation, or… … Ballentine's law dictionary
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return on invested capital — UK US noun [C or U] (ABBREVIATION ROIC) ► FINANCE, ACCOUNTING a company s profit for a particular period compared with the capital invested in the company. This shows how effectively the company is using the amount of capital invested in it to… … Financial and business terms
Return On New Invested Capital - RONIC — A calculation used, either by a firm or investors, to determine the amount of return that a firm could earn on additional contributed capital. The calculation measures the return generated when a company converts its capital into capital… … Investment dictionary
Return On Gross Invested Capital - ROGIC — The amount that a company earns on the total investment it has made in its business. Total gross invested capital is equal to all of the shareholders equity (both common and preferred shares) plus the total gross debt that the company has… … Investment dictionary