This has been bugging me for ages. Assume CapEx is $1,000. Which version is correct?
Version 1
Tax-Adjusted EBIT.......xxx
Less/Minus: CapEx....1,000
Version 2
Tax-Adjusted EBIT......xxx
Less/Minus: CapEx...(1,000)
Version 3
Tax-Adjusted EBIT....xxx
CapEx.......................1,000
Version 4
Tax-Adjusted EBIT....xxx
CapEx.......................(1,000)
Which ones are correct? I've seen all 4 being used
| +722 | Bank of America - Juniors Strike to start Monday May 6th | 104 | 3m | |
| +519 | BOFA ALREADY TRYING TO COVER UP THEIR TRACKS | 68 | 1h | |
| +282 | This is a dark day for Wall Street. | 32 | 14m | |
| +154 | Investment Banking US League Table YTD 2024 (FactSet) | 85 | 4h | |
| +147 | Big Layoff at Barclays - 5/1/24 | 85 | 6h | |
| +90 | “Americans just work harder” | 54 | 1h | |
| +83 | Would comitting to ATL İB be stupid? Please give feedback. | 45 | 3d | |
| +69 | Sleeping on Jefferies??? | 35 | 2s | |
| +66 | A shitter's comprehensive guide to sophomore year recruiting | 8 | 2s | |
| +60 | What's up with RBC nowadays? | 28 | 2s |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
Version 2
I use version 1, to each his own...as long as you aren't retarded you should be able to grasp that capex is taken out....
HFFBALLfan123 no shit, but there are some monstrous 10-page DCF/lbo models where everything is not as straight-forward
Well Phanton, when i quickly glance at the bottom of a DCF and see "Less: CapEx", i assume the formula is already subtracting CapEx flowing from my depreciation schedule.
And not sure how the size of the model factors into whether or not you use a + or - sign for CapEx calc....if you are linking from your depreciation schedule straight into your CF from investing section of CF you just reference and then flow that into your DCF with a - sign in front of it....
I've seen everything. But i favor strongly v2 and v4. CAPEX is a cash outflow, and since this is a DCF UFCF build, you should express CF outflows as such (1,000)
I don't have much experience with accounting, but versions 2 and 3 looks as if you are adding CapEx: Version 2: Minus (1000) at least to me implies -(-1000) = +1000 Version 3: Capex.....1000 implies +1000
So how do you not get confused with these notations? Obviously in this case you know that you need to subtract Capex, but it doesn't make sense to me using V2 or 3.
If anyone could explain what the standard procedure is it would be great!
Don't overthink it. If you see "Less: xyz" as a line item, and the actual number is in parenthesis, that doesn't mean you're subtracting a negative number.
Thanks! I just wanted to make sure what is the generally accepted rationale.
Qui magni dicta enim enim eveniet est. Voluptatem laborum nesciunt quae quos officiis quaerat. Nostrum ipsa possimus similique ex.
Odio ipsum odit veniam eos cumque sit voluptatem voluptatem. Reprehenderit quas assumenda nemo enim illum. Eius accusantium facere cumque aliquid voluptatum nihil beatae.
Eius eligendi rerum et enim cupiditate dolor hic molestias. Iusto est quidem qui. Ut quis fugit quisquam ut explicabo. Ut quo ut qui in cupiditate recusandae. Vitae fugiat debitis repudiandae fugit atque ad.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...