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Question: What is working capital? return on capital employed?

(Posted by: HI on 2009-05-19 06:38:38)

What does 'working capital' and 'return on capital employed' mean? I don't understand so please can you explain in really simple words that a child would understand. and what are operations?

Posted by: Eddy T on 2009-05-19, 06:47:50

In business you need money to make a profit. Working capital is money you need for business. And return on capital is profit.

Posted by: Brown Eyes on 2009-05-19, 06:54:53

Working capital is needed to pay for day-to-day operations of any business. Return on capital employed means the reward being given from the business to the owner,i.e how much profit is being returned to the owner according to the increase or decrease in money invested