Definition for : Negative capital employed

Companies with negative Capital employed usually have a highly Negative working capital exceeding the size of their Net fixed assets. This type of company typically posts a very high Return on Equity. Return on Capital employed of these companies should take into account Income from short-term financial investments (included in Earnings) and the size of these investments (included in Capital employed): ROCE = (EBIT + Financial income) ? (1 – corporate Income tax) / (Capital employed + Short-term financial investments). Such companies Factor their Financial income into the selling price of their products and services.
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