Capital employed, also known as funds employed, is the total amount of capital used for the acquisition of profits by a firm or project. It is a financial metric that provides insight into how a company is investing its money. Capital employed can be defined in different contexts, but it generally refers to the capital investment necessary for a business to function. It is commonly represented as total assets less current liabilities or fixed assets plus working capital requirement. Capital employed is used with other financial metrics to determine the return on a companys assets as well as how effective management is at employing capital.

There are different ways to calculate capital employed, but the most commonly used formula is total assets minus current liabilities. Another formula is adding non-current liabilities to owners equity. Capital employed can also be calculated by adding fixed assets to working capital or by adding equity to non-current liabilities.

Capital employed can give a snapshot of how a company is investing its money, but it is better interpreted by combining it with other information to form an analysis metric such as return on capital employed (ROCE). ROCE is a profitability ratio that measures the profitability of a company and the efficiency with which a company is using its capital.