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 excl;uded from this figure, as they do not attract interest
payments.
The
value of investment 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:
Investment 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 Investment is not the same value as the Total Liabilities.
Related Terminology:
Funds
employed is sometimes called Funds Employed or Capital Employed.