How to calculate/forecast Capex and PPE in this model ? extracting Depreciation from CF
Cash Flow
Purchases of equipment/ Capex $(504,806) $(560,296) $(646,456)
Proceeds from sales of property and equipment $1,423 $9,360 $1,428
Blance sheet
PP&E $2,264,062 $2,434,456 $2,701,282
Goodwill $4,338,589 $4,338,589 $4,338,589
Other intangible assets,net $1,200,994 $1,200,659 $1,200,428
Other assets, net $21,830 $20,823 $28,760
Depreciation From cash flow( not given in IS)
D&A $352,431 $379,931 $404,231
I assume data you are providing are previous years.
If so:
1- Divide Capex by revenue to get a %.
2- Divide Depreciation by revenue to get a %.
Then you forecast revenue growth and multiply the figure by the average percentage of the past years CapEx as a % Revenue and Depr as a % Revenue. Other people calculate Depr as a % of CapEx. I personally consider is up to you entirely.
3 - For PPE you need a PPE schedule: 3.1 Put as beggining PPE the ending PPE of last year. 3.2 Add CapEx 3.3 Subtract Depreciation. 3.4 You have your ending PPE.*
That is how I have learnt to asses the PPE schedule.
Depreciation is always in the CF. If appears in the IS then I am inclined to believe is accumulated depreciation.
Hope it helps mate, take care!
*assuming is net PPE.
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