Invested Capital

Dictionary Says

Definition of 'Invested Capital'


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.

Investopedia Says

Investopedia explains 'Invested Capital'


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.

comments powered by Disqus
Hot Definitions
  1. Valuation

    The process of determining the current worth of an asset or company. There are many techniques that can be used to determine value, some are subjective and others are objective.
  2. Valuation

    The process of determining the current worth of an asset or company. There are many techniques that can be used to determine value, some are subjective and others are objective.
  3. Tech Street

    A term used in the financial markets and the press to refer to the technology sector. Companies like Intel, Microsoft, Apple and Dell are all considered to be part of Tech Street.
  4. Tech Street

    A term used in the financial markets and the press to refer to the technology sector. Companies like Intel, Microsoft, Apple and Dell are all considered to be part of Tech Street.
  5. Momentum Investing

    An investment strategy that aims to capitalize on the continuance of existing trends in the market. The momentum investor believes that large increases in the price of a security will be followed by additional gains and vice versa for declining values.
  6. Momentum Investing

    An investment strategy that aims to capitalize on the continuance of existing trends in the market. The momentum investor believes that large increases in the price of a security will be followed by additional gains and vice versa for declining values.
Trading Center