What Is Adjusted Capital Employed Multiplier?
The Adjusted Capital Employed Multiplier is a valuation metric used in corporate finance to assess a company's value by normalizing its capital base. This multiplier refines the traditional notion of capital employed by making specific adjustments to a company's financial statements to reflect a more accurate economic reality for valuation purposes. Such adjustments typically account for non-operating assets, non-recurring items, and the appropriate recognition of certain liabilities or intangible assets that might not be fully captured by standard accounting practices. The goal of using an Adjusted Capital Employed Multiplier is to provide a cleaner, more comparable figure for assessing how efficiently a business generates returns on its true operational capital.
History and Origin
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