Question

Name the difference between Capital Employed and Non-current Liabilities:

Options

• Shareholders’ Funds

• Capital Employed

• Total Debts

• Total Assets

Answer 1

Shareholders’ Funds

Explanation:

Capital Employed represents the total long-term funds invested in a business to generate profits, and it can be calculated from the liabilities side of a balance sheet by adding Shareholders’ Funds (Equity) and Non-current Liabilities (Long-term Debts). Mathematically, since Capital Employed equals the sum of these two components, subtracting Non-current Liabilities from Capital Employed directly isolates the remaining component, which represents the owners' equity or Shareholders’ Funds.