This term refers
to all of the money that is invested in the company (or nearly all of
it).
The total investment is all of the funds that are employed within the company to enable it to operate on a day-to-day basis.
Its constituent parts are Net Worth (the owners funds) and all interest-bearing borrowings. Items such as Creditors, Accruals and the like are excluded from this figure, as they do not attract interest payments.
The value of Funds Employed informs you of how much money is invested into the company to enable it to function on a daily basis and although by itself it is not a KPI it is used in the calculation of many other KPI's.
Example:
Discussion:
Funds Employed is always shown as a monetary value and is usually shown on the summary page of your financial information. If the value of your Funds Employed is not shown on your summary page you can calculate it for yourself from the balance sheet.
Please keep in mind that the value of the Funds Employed is not the same value as the Total Liabilities.
Related Terminology:
Funds
employed is sometimes called Investment or Capital Employed.