financial-metrics
CAPEX is cash invested in long-lived assets — property, plant, equipment and capitalised intangibles — reported in investing cash flows. It is the reinvestment EBITDA never subtracts.
Under IAS 16, qualifying spend on PPE is capitalised and then depreciated. IAS 38 does the same for certain development costs and software. The cash leaves in the investing section of IAS 7 immediately. EBITDA never sees it.
That is why every serious DCF and every honest credit paper splits maintenance capex (stay in business) from growth capex (new capacity, new products, M&A integration).
From the cash-flow statement:
CAPEX = Purchases of PPE and intangibles − proceeds from disposals (if you want net capex)
A teaching identity used in valuation:
FCFF ≈ EBIT (1 − t) + D&A − CAPEX − ΔNWC
(see free cash flow for the full protocol).
Illustration only. Hypothetical cold-chain logistics operator.
| Amount | Nature | |
|---|---|---|
| Depreciation | €2.1m | P&L |
| Vehicle replacement | €1.8m | Maintenance capex |
| New hub fit-out | €3.4m | Growth capex |
| Capitalised software | €0.4m | Mixed — ask |
| Gross capex | €5.6m | Investing cash |
| EBITDA | €7.0m |
“Cash EBITDA after maintenance” is about €5.2m (€7.0m − €1.8m), not €7.0m. A buyer underwriting the hub as optional growth capex must still fund it if the equity story requires the extra capacity.
Capex / depreciation persistently below 1.0 can mean a harvest, accounting lives that are too short, or underinvestment that will arrive as opex or lost revenue later. Capex / sales is a sector fingerprint: telecoms and process industry vs asset-light software.
ROIC (invested capital rises with capex); debt sculpting; quality of earnings on capitalised labour.
Leases, cloud-computing arrangements, and R&D capitalisation policies move spend between opex and capex without changing the physics. Cash capex can lag commissioning.
Dazur tags capex as maintenance, growth or capitalised opex-in-disguise so an EBITDA multiple conversation can be translated into a cash conversation before investor matching.