Capital employed - balance sheet

Others 1096 views 2 replies

Q. Whether on account of term loan instalments repayment, capital employed will come down ?

ASSUMPTIONS:

Instalments are paid out of earnings/retained earnings.

There is no depreciation applicable to the asset (just believe it)

The firm is running profitably.

Accounting standards do not apply. (for simplicity)

Assets created are used for Job-work. (for simplicity)

No Current liabilities & current assets except bank a/c (for simplicity)

 

 

 

 

Replies (2)

Yes Capital employed will decrease.

Capital employed= Share Capital+Reserve & Surplus+Non current liability

Hence Loan repayment are also the part of Capital Employed


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register