Venture capital


The capital invested and the value in the joint place is the sum of the company’s debts and property rights, and there are several ways to calculate this value, one of which is the subtraction of cash and non-profit traded liabilities (NIBCL) from the total assets, including tax liabilities and accounts payable, Venture capital as long as They are not subject to interest or fees, and there is another way to calculate the invested capital is to add the book value of the company’s ownership rights to the book value of the value of its debts, then put non-operating assets including cash and cash equivalents and marketable securities, and activity assets Excluded .

Venture capital There is another way to calculate the invested capital is to obtain the working capital by subtracting the current liabilities from the current assets, then you get the working capital that is not cash by subtracting cash from the value of the working capital that is calculated only, and finally the working non-cash capital is added To the firm’s fixed assets, also known as long-term or non-current assets.

The value can also be calculated in the numerator in a number of ways, and the most direct way is to subtract profits from the company’s net income, on the other hand, and given that the company may have benefited from a one-time income source not related to its core business – there are unexpected differences from fluctuations Foreign exchange rates, for example, it is often best to look at net operating profits after taxes, and calculate net operating profits after taxes by adjusting the operating profit of taxes.

Venture capital The return on the invested capital is always calculated as a percentage and is usually expressed as an annual value or the past twelve months, and it should be compared to the cost of the company’s capital to determine whether the company is achieving value, if the return on the invested capital is greater than the weighted average of the cost Capital, the most common cost of capital measure and value is achieved, and if not, the value is destroyed.

For this reason, the return on invested capital is considered one of the brother’s measures of value for the account, therefore, it is important for some sectors than others, however, it is more important for some sectors than others, because companies that operate oil platforms or semiconductor manufacturing invest capital is more intense Of those that require less equipment.

The downside of this measure is that it tells nothing about the portion of the business’s activity. If you do your calculation on the basis of net income (minus profits) instead of net operating profit after taxes, the result can be vague, more because it is possible that Derived from a single event, non-recurring.

Return on invested capital provides the necessary context for other measures such as the price-to-profit ratio, and if we look at isolation separately, Venture capital the price-to-profit ratio may suggest that the company is dispersed in the sale, but the decrease may be due to the fact that the company no longer generates value to shareholders At the same rate or absolutely, on the other hand, companies that consistently generate high rates of return on invested capital may be worth trading at higher prices for other stocks, even if the profitability / profit ratios are very high.

What are the forms of capital?

Fixed capital

It is the material that does not change and does not enter into commercial exchange or consumption within production cycles. One of the most important examples of fixed capital in most economic activities is land and construction.

Moving capital

It is all the materials and goods that go into production and have a direct value in the value of the produced product. In summary, it is all the materials that enter into a renewable economic cycle and the most important examples of capital in the industry, for example, are the raw materials that will be manufactured and labor.

Total capital

It is the value of all the materials, means, tools, and fixed and mobile labor needed to produce a complete economic cycle, and the economic cycle is the time period necessary to replenish the moving capital.


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