How Can You Calculate The Net Investment?

4 Answers

Dominic Ladden Profile
Dominic Ladden answered
To be able to manage any investment successfully you really need to be able to calculate the net investment. In simple terms the net investment is the total amount of money or cash that you have invested into a company or another location in order to attempt to increase the amount.

It has to include every single cent that has left your account in order to cover the complete net investment. The official calculation of net investment is capital expenditures with the non-cash depreciation deducted from it.

Obviously, from company to company and individual to individual, the way in which you will reach this figure will vary quite drastically. On some occasions it will be an extremely simple calculation, whereas on other occasions it may well be quite complicated as there are far more factors that need to be taken into consideration.

The important thing to remember is that the net investment is the total amount of capital invested, it must include absolutely everything.

It is no secret that the world has been suffering from one of the worst recessions that we have seen for a number of decades. Due to this fact it is extremely important that you take good care of every any investment you make to ensure that you not only do not lose any money, but also that you are always aware of exactly how much it is that you have invested and thus exactly how much profit it is that you have made or are making.
Anonymous Profile
Anonymous answered
In case of profit the formula for Net Investment is:
 
[(Initial Investment+Profit)-(Drawing)]
 
and in case of loss the formula for Net Investment is:
 
[(Initial Profit-Loss)-(Drawings)]

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Anonymous