The Capital employed is of two types i.e. gross capital employed and net capital employed. Gross capital employed refers to the sum of all fixed and current assets but not the fictitious assets. The net capital employed refers to the gross capital employed minus current liabilities. In the present study the concept of net capital employed has been used to calculate the return on capital employed.

KEYWORDS: Gross Capital Employed, Net Capital Employed, Fictitious Assets, Current Assets.