Enter the current PP&E, past PP&E, and the depreciation over the same time period into the calculator to determine the total capital expenditure.
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Capital Expenditure Formula
The following formula is used to calculate a total capital expenditure.
CapEx = PPE_c - PPE_p + D
- Where CapEx is the capital expenditure
- PPEc is the current period property, plant, & equipment
- PPEp is the previous property, plant, & equipment
- D is the total depreciation
To calculate capital expenditure, subtract the previous cost of property, plant, and equipment by the cost in the current period, then add the total depreciation.
Capital Expenditure Definition
Capital expenditure is a measure of the total capital spent by a company to produce a good or service.
Capital Expenditure Example
How to calculate capital expenditure?
- First, determine the PPE of the current period.
Determine the total value of the property, plant, & equipment of the current period.
- Next, determine the PPE of the previous period.
Determine the total value of the PPE of the previous period being analyzed.
- Next, determine the total depreciation.
Calculate the total depreciation of the PPE over the time period.
- Finally, calculate the capital expenditure.
Calculate the capital expenditure using the formula above and the values for PPE and depreciation.
FAQ
Capex is short for capital expenditure and is a measure of the total capital spent on major physical goods or services that a company will use for a long period of time.
