hi, i have a really hard discussion with my finance teacher about CAPEz, Iwan to knwo you need calculate and put in the cash flow a capex for every year, for evaluate a company value?

Question

anonymous · Answer

Yes, you would always need to calculate and put capex in cash flows. For any valuation exercise you would need to deduct the capex to calculate FCFE and discount FCFE to arrive at an valuation. Hope this helps

anonymous · Answer

the reason you need to apply capex is that if the company is going to grow sales, is not realistic if it doesn´t invest in machinery, plant, equipments and so on.
the valuators usually use a minimal capex, in the scenario of a company that is not going to grow of CAPEX= Amortizacion   because if you don´t invest as minimal for you amortizasion look that your assets are going to loose capability to generate sales or profits

i hope you help