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Capital employed and cost of capital

This topic has 1 reply, 2 voices, and was last updated 10 years ago by John Moffat.

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May 31, 2015 at 1:56 pm #250964
seanog91
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Is cost of capital a liability when it comes to working out capital employed ?(Total Assets less current liabilities)
May 31, 2015 at 3:50 pm #251016
John Moffat
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The cost of capital is an interest rate and is certainly not a liability!!!
(I don’t think you meant to write that 🙂 )
The total capital employed is equity + non-current liabilities (which is always equal to total assets – current liabilities)
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