<P> Capital employed, also known as funds employed, is the total amount of capital used for the acquisition of profits . It is the value of all the assets employed in a business and can be calculated by adding fixed assets to working capital or subtracting current liabilities from total assets: </P> <P> Liabilities include more than debt . Long - term debt and short - term debt are both subject to interest . Current liabilities include short - term debt . Debt that is not due within one year is long - term debt . Liabilities that do not fall under debt are not subject to interest . However, future interest on the debt is not shown on the balance sheet . Interest accrued is shown as interest payable . </P> <P> Capital employed can be defined as equity plus loans which are subject to interest, or one can say that it is total assets less non-interest - bearing responsibilities . </P> <P> Capital employed can be defined as shareholders funds (i.e. Share capital and reserves) plus creditors> 1 year (long - term liabilities) plus provisions for liabilities and charges . NB . This must equal Total assets less current liabilities, by definition . </P>

What does total assets less current liabilities mean