Replying to Avatar plebiANON

Might as well just use EBITDA less CapEx spend. Can’t properly assess a business for having to include depreciation and amort in expenses for non-actual cash outlays.
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GRANTGILLIAM 2y ago

That works too, just need to be mindful of potential lumpiness (maybe use an average if necessary)

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plebiANON 2y ago

Definitely agreed with that. Having good management that’s on top of their CapEx needs is critical. Seen lots of businesses collapse due to failure to account for CapEx needs appropriately.

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Scott 2y ago

Maintenance CapEx probably ideally.

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plebiANON 2y ago

Equipment replacement is just as important as maintaining existing equipment. You need a good handle on both.

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Scott 2y ago

In my world, replacing existing equipment would fall into maintenance CapEx. "Maintenance" in this sense is "CapEx necessary in order to service / maintain existing cash flows"

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plebiANON 2y ago

Fair enough. Sounds like we are all saying the same thing just different semantics.