Net Capital Expenditures for a Firm
  • Net Capital Expenditures for a Firm
Originally published: 21/06/2016 10:50
Last version published: 27/07/2016 12:43
Publication number: ELQ-70046-2
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Net Capital Expenditures for a Firm

Estimate the net capital expenditures for a firm, when it reaches stable growth

approacheschoicefinancefirmnet capital expendituresstable growth

Description
This file summarizes the three approaches that can be used to estimate the net capital expenditures for a firm.

Approach 1: Assume Net Capital Expenditures are zero. (Cap Ex is 100% of Depreciation)

Approach 2: Assume that Capital/Expenditures/Depreciation approaches the industry average (see dataset)

Approach 3: Estimate the net capital expenditures needed based upon return on capital

Note: this model is being shared with the authorization of Professor Aswath Damodaran from NYU Stern Business School (www.damodaran.com)

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1 Excel Model File, 1 ReadMe

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Further information

Explain the three approaches that can be used to estimate the net capital expenditures for a firm.

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