What goes under the Capital Employed, when calculating the ROI? (PP&E, Inventory, AR, AP, Cash?)

Hi,

Not sure if you are referring to ROI or ROCE (Return on Capital Employed).

The first is Profit from Investment / Cost of investment and is more "cash flow" oriented, so here you do not need to perform a capital employed calculation

If you are trying to compute ROCE = EBIT / Capital Employed (many version of it exists - just type ROCE on google) you can basically calculate Capital Employed via

Capital Employed = Total Assets - Current Liabilities = Equity + Non Current Liabilites

Many people do include different terms. My favourite is Capital Employed = Fixed Assets + Working Capital

In Fixed Assets you have PP&E, in Working Capital you have AR, AP and Inventory.

Regarding cash you can have different ideas - type on google corporate finance Capital employed to deep dive about this. You will find ton of precise indications

Hope it helps.

Paul