Capital employed is a financial metric used to assess the total amount of capital that a company has invested in its operations. It is used to measure the long-term financial health and efficiency of a company. Capital employed is calculated as the sum of the following components:

Shareholders' Equity: This is the portion of capital contributed by the owners (shareholders) of the company. It includes common equity (common stock) and any retained earnings. Shareholders' equity represents the owners' residual interest in the assets of the company after deducting liabilities.

Long-Term Debt: This includes all long-term liabilities that a company has incurred, such as long-term loans, bonds, and other debt instruments. It represents external financing that the company has raised for its operations and may include both secured and unsecured debt.

Reserves and Surplus: This component includes any additional reserves and surplus that the company has accumulated over time. This may include items like general reserves, capital reserves, and any other undistributed profits.

The formula for calculating capital employed is:

Capital Employed = Shareholders' Equity + Long-Term Debt + Reserves and Surplus