INVESTED CAPITAL Meaning and
Definition
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Invested capital refers to the total amount of money or resources that a company has dedicated to its operations. It represents the funds that have been allocated by a company for the purchase of long-term assets and the execution of its strategic initiatives.
In financial terms, invested capital comprises both equity and debt. Equity represents the contributions made by shareholders, including the initial investment, additional stock purchases, and retained earnings. Debt refers to the loans and other borrowings that the company has incurred.
Invested capital is an important financial metric because it reflects the resources that a company has committed to generating profits. It includes the funds used to purchase property, plant, and equipment, as well as investments in research and development, marketing campaigns, and expansion projects.
By examining the level of invested capital, investors and analysts can assess the company's capacity to generate returns and manage its assets efficiently. It can also help determine the level of risk associated with the company's capital structure and gauge its financial health.
Invested capital can be calculated by adding long-term debt and total shareholders' equity, deducting any non-operating assets or liabilities, and including any adjustments for operating leases or other off-balance sheet arrangements. This value provides a snapshot of the financial resources that a company has dedicated to its business activities and represents a crucial element in the overall evaluation of a company's performance.
Common Misspellings for INVESTED CAPITAL
- unvested capital
- jnvested capital
- knvested capital
- onvested capital
- 9nvested capital
- 8nvested capital
- ibvested capital
- imvested capital
- ijvested capital
- ihvested capital
- incested capital
- inbested capital
- ingested capital
- infested capital
- invwsted capital
- invssted capital
- invdsted capital
- invrsted capital
- inv4sted capital
- inv3sted capital
Etymology of INVESTED CAPITAL
The word "invested" comes from the Latin word "investire", which means "to clothe or dress" or "to put on". In the context of finance and business, "invested" refers to the act of putting money or resources into something with the expectation of gaining a financial return or benefit.
The word "capital" has its roots in the Latin word "caput", meaning "head" or "top". In the context of finance, "capital" represents financial resources or wealth that can be used to generate income, investments, or business ventures.
Therefore, "invested capital" combines these two words to refer to the financial resources or funds that have been committed or put into an investment or business endeavor, with the expectation of generating profits or returns.
