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This paper presents the results of an investigation of the effects of broken squirrel-cage bars. In the investigation, a comprehensive time-stepping coupled finite element approach was fully used to compute stator current waveforms, torque, magnetic flux density waveform, the rotor bar currents, and end-ring currents for three cases: no broken bars, one broken bar, and two adjacent broken bars. The iron core loss distributions in the stator are computed, and the harmonic component of air gap flux density is analyzed. This paper also gives the computed rotor parameters and the vector diagram of the rotor current in cages with and without broken bars. From these data, the faulty signatures are extracted. Experimental results derived from a two-pole 1.1 kW induction motor confirm the validity of the proposed method. Furthermore, this method, which could help to develop diagnostics of broken bars and performance evaluation of induction motor, has great potential in future applications.