FCF = NOPAT - change in NOA (Net Operating Assets) which is - > NOPAT + Depreciation/Amortization - Change in Working Capital (WC) - CAPEX My question is, how do you compute CAPEX ? Is it simply the change in TOTAL Long-Term Assets or there is something else to be added?
2x2equals4 Wrote: ------------------------------------------------------- > FCF = NOPAT - change in NOA (Net Operating > Assets) > which is - > NOPAT + Depreciation/Amortization - > Change in Working Capital (WC) - CAPEX > > My question is, how do you compute CAPEX ? Is it > simply the change in TOTAL Long-Term Assets or > there is something else to be added? Capital expenditures are found on the statement of cash flows (CFI). EDIT: Simply taking the difference in PP&E wouldn’t be appropriate due to depreciation allocating the cost of assets held. In addition, the company might sell some of its older assets that still have a CV > 0.
Since expenditures are capitalized u will find it on the balance sheet there for the change in PPE hope this helps
Remember that CAPEX includes new Purchases - any Sales. because the Sales part would be an inflow. So Begin Net PPE + Purchases - Depr - Sales = End Net PPE. Given these numbers - and either one of Purchases or Sales - you could tie out the numbers. The Sales figure you obtain above is the Book Value of the Sale. Sales Proceeds (if given) - Book Value of Sale = Gain/Loss on Sale.
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