Difference between capital employed & net worth
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
12 August 2011
Dear Sir, please explain me the difference Between Capital employed & Net worth
CMA Ramesh Krishnan
(Expert)
13 August 2011
The networth include equity share capital, preference share capital, reserves and surplus including accumulated profits. However fictitious assets like accumulated deferred expenses etc should be deducted from the total of these items to shareholder funds. The shareholder funds so calculated are known as net worth of the business.
But capital employed includes the share holders funds plus long term liabilities also
The networth include equity share capital, preference share capital, reserves and surplus including accumulated profits. However fictitious assets like accumulated deferred expenses etc should be deducted from the total of these items to shareholder funds. The shareholder funds so calculated are known as net worth of the business.
But capital employed includes the share holders funds plus long term liabilities also
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13 August 2011
I agree with the expert but the losses are also to be deducted to arrive at the Net worth.
Capital employed is actual Paid up share capital in the company including Share Premium
Capital employed is actual Paid up share capital in the company including Share Premium
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