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Capital Employed is also sometimes referred to as Funds Employed. It is basically the total of a company’s Business Assets (excluding its Cash holdings) less its Trade-related Liabilities.

Capital Employed = Net Assets – Cash + Borrowings

Example: Petronas Dagangan Bhd
PETDAG’s Consolidated Balance Sheet for 2006 and 2007 were reported as follows:

Capital Employed for 2006 = 3091.7 + 15.3 – 466 = RM 2,641.0 million
Capital Employed for 2007 = 3542.9 + 5.3 – 544 = RM 3,004.2 million