The correct answer is: A. Total assets – Current Liabilities.
Net invested capital is a measure of a company’s financial health. It is calculated by subtracting a company’s current liabilities from its total assets. This gives a measure of the company’s long-term financial stability.
A company’s current liabilities are its debts that are due within one year. These include things like accounts payable, short-term loans, and accrued expenses. A company’s total assets are the value of everything it owns, including cash, inventory, property, and equipment.
Net invested capital is important because it gives a measure of how much money a company has invested in its business. A high net invested capital indicates that a company is well-funded and has a strong financial position. A low net invested capital indicates that a company may be struggling financially.
Option B is incorrect because it subtracts total liabilities from total assets. This gives a measure of a company’s equity. Equity is the difference between a company’s assets and its liabilities. It is a measure of the company’s ownership interest in its assets.
Option C is incorrect because it subtracts fictitious assets from current liabilities. Fictitious assets are assets that have no real value. They are often used to inflate a company’s financial statements. Current liabilities are debts that are due within one year.
Option D is incorrect because it is not a valid option.