Whats the average Cap Ex?

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October 30, 2021

by a searcher in Chicago, IL, USA

Is there an average percentage that businesses spend on cap ex if the business requires equipment to operate? For example: new printers in a print shop, trucks in a transport business or new CNC machines for manufacturing.

Do they buy as needed or is there an average amount allocated?

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Reply by a searcher
from University of Virginia in Richmond, VA, USA
I don’t know if it’s useful to know capex in general but it’s pretty easy to figure it when you’re assessing any given target. The tax returns have balance sheet and income statement info and you can use the following formula: CapEx = PP&E (current period) – PP&E (prior period) + Depreciation (current period)


That’ll tell you how capex has trended over previous years and how much they paid in it for a given amount of growth.
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Reply by a searcher
from The University of Texas at Austin in Des Moines, IA, USA
No there isn't an easy plug and play average. Different businesses have different CAPEX requirements and different owners make different decisions about spending on equipment. Commonly people use depreciation is as a rough estimate of yearly CAPEX requirements, but using the rule blindly can be problematic.
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