Easy question on calculating capital expenditure (partial period)
I am trying to calculate the capital expenditure. Beginning PPE as of September 30, 2018 is $1,557,260. Ending PPE as of July 31, 2019 is 1,571,951. Depreciation from September 30, 2018 to July 31, 2019 (10 months) is 104,270. How do I calculate the CapEx? How do I adjust the partial period? Thanks so much.
Why do you need to adjust for a partial period at all? The question itself does not address it beyond the fact the period is, indeed, less than one year. As far as CapEx goes (assuming we're talking about PPE, net), CapEx = PPE Ending - PPE Beginning + Depreciation
This would be my answer as well, unless I am missing something. The balance sheet is just a point-in-time snapshot - you never need to adjust anything for stub periods.
What the excel shows is: Beginning Date: 2018-09-30. End date: 2019-07-31 Days in between= 0.83 [(end-beginning)/365] Partial period adjustment = 1-0.83=0.17
depreciation adjustment: prior period depreciation*partial period adjustment + current year depreciation=123,305.
Capex Calculation: CapEx=-Ending PPE+opening PPE+depreciation =-1571951+1557260+123305
I do not understand what the excel is showing at all. Please help.
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