Effect of Capex on Financial Statements
If Capex increases by 100, how does it effect the 3 financial statements? A bit unclear about this, specifically as it relates to impact on income statement?
Trending Content - Investment Banking Forum
| +267 | Why UBS Is the Worst Place to Start Your IB Career | 40 | 2d |
| +219 | UBS 2nd Year Analyst Q&A (2026) | 41 | 1d |
| +102 | What's your craziest "hardo" story? | 18 | 4h |
| +73 | UBS IB 26Q2 a Disaster! Advisory Revenue Down 23%, Capital MarketsDown 5% | 11 | 4h |
| +53 | Wolf of Wall Street vs. Reality: Anyone else feel scammed by the movies? | 19 | 18h |
| +50 | Suspended for a Year | 21 | 23h |
| +49 | Elite Boutique interview questions | 17 | 2d |
| +37 | so confused about 28 SA timeline | 30 | 14h |
| +34 | Lincoln International Return Offers | 9 | 2h |
| +33 | Rate my non-target resume | 19 | 7h |
Career Resources
No effect in the IS
As depreciation expense is linked to CAPEX, doesn't the I/S get reduced by the depreciation amount?
Capex and Depr are indeed interlinked, but as of year n+1. I do believe this scenario refers to year 0
Okay got it. So in Year 1 what would the Financial Statements look like if depreciation expense was 5. Would it be:
I/S: goes down by 5
CFS: goes down by 5
B/S: Assets go down by 5 (as cash goes down by 5) and PPE goes down by 5, thus balancing out.
Depreciation is a non cash expense and is added back on the cash flow statement
I would say the following:
Does this makes sense to you?
Got it thanks. Does NI specifically flow into the Retained Earnings of Shareholders Equity?
Quas nihil dolore soluta in molestiae. Provident autem corrupti repellendus libero aut.
Commodi id qui nemo repudiandae quo. Similique error vel expedita voluptas magnam cum. Dignissimos excepturi est asperiores. Aliquam molestias delectus ut quo unde.
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...