1. What is CapEx?

Capital Expenditure (CapEx) refers to funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology, or equipment. It represents investments in long-term assets that will be used beyond the current tax year.

2. How Does the Calculator Work?

The calculator uses the CapEx formula:

Where:

• Ending PPE — Property, Plant, and Equipment at end of period
• Beginning PPE — Property, Plant, and Equipment at start of period
• Depreciation — Depreciation expense for the period

Explanation: The formula calculates capital expenditures by accounting for changes in fixed assets while adjusting for depreciation expenses.

3. Importance of CapEx Calculation

Details: CapEx is crucial for financial analysis as it represents investments in future growth. It's used in cash flow analysis, valuation models, and assessing a company's growth strategy.

4. Using the Calculator

Tips: Enter all values in dollars. Ending and Beginning PPE should be gross values (before accumulated depreciation). Depreciation should be the period's depreciation expense.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between CapEx and OpEx?
A: CapEx refers to long-term asset investments, while Operating Expenses (OpEx) are day-to-day expenses. CapEx is capitalized and depreciated, while OpEx is fully deducted in the year incurred.

Q2: Where can I find PPE and depreciation values?
A: These are found on the balance sheet (PPE) and income statement (depreciation) in a company's financial reports.

Q3: Why add back depreciation in the formula?
A: Depreciation is a non-cash expense that reduces net PPE. Adding it back gives the true capital expenditure amount.

Q4: How does CapEx affect cash flow?
A: CapEx appears as a cash outflow in the investing activities section of the cash flow statement.

Q5: What's a good CapEx ratio?
A: There's no universal ratio, but analysts compare CapEx to revenue, operating cash flow, or depreciation to assess investment levels.

CapEx Calculator© - All Rights Reserved 2025