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
| +323 | UBS Tech MD hires Son (from no-name college) as an Intern | 54 | 8h |
| +89 | [Official] 2026 IB Analyst Bonus Megathread (with 2025 Consolidated Pay and Perks/Benefits) | 12 | 1d |
| +53 | Is DCM actually underrated ? | 20 | 6h |
| +46 | Are all Tech / TMT groups sweaty? | 33 | 1h |
| +46 | Evercore Intern Seizure | 9 | 1h |
| +41 | UBS Groups Ranked by Future Outlook | 20 | 5d |
| +41 | JPM M&A is Gone??? Purely Coverage Banking??? | 20 | 14h |
| +37 | Am I behind? 31 Year Old Analyst | 10 | 17h |
| +32 | UVA McIntire vs Cornell Dyson for IB | 19 | 3d |
| +32 | Losing my personality in Banking | 5 | 1d |
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.
Assumenda ut et facere explicabo. Ut dolorum assumenda molestiae minus incidunt officia ipsum. Praesentium qui enim qui asperiores dicta a.
Rem est cum vitae atque natus quasi. Consequatur eaque dolores molestias iusto eligendi. Commodi quia exercitationem quaerat.
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...