How do you calculate CapEx?
When doing a DCF and calculating Capex, do you just use "purchase of PP&E" in the cash flow statement?
Are there other ways?
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% of sales, converging to D&A in the long-term.
Internally, I can project out our target CapEx for the next three years or so...but for a five-ten year projection I also look to some percentage above and beyond our long-term D&A so that we're appropriately feeding the beast the Capital it needs to survive.
Externally, I'd look to any guidance given and then to some level of x+ on D&A (SL is easiest; macrs or ddv may require you to normalize this a bit...)
Inflation will nearly always cause your replacements to cost more...technology may help alleviate some of this, but its far and few between in my industry (healthcare) that replacements are cheaper than the thing they are replacing...
First, use the search function. If you can't be bothered to do that, then use New PPE=Old PPE + CapEx - Depreciation and rearrange the variables for CapEx after getting PPE figures from current and previous BS and Depr. from current IS.
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