For companies at the low- or no-growth level, capital expenditures are little more than a replacement exercise, even though some technological evolution is usually involved. Where significant growth is actively pursued through positive net capital-expenditure planning and spending, the task becomes more challenging. Most growing businesses go through a cycle in which growth accelerates, then [...]

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In evaluating capital-expenditure options, companies frequently find leasing to be a better deal than buying. A good part of the economic benefit of leasing is attributable to the fact that leasing companies often have more buying leverage, more income to shelter from taxes and a higher tax rate than their customers do. The result is [...]

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The Capex cash driver of 0.35 in the example above may sound like a high proportion, but remember that
the assets acquired have depreciable lives. If a particular asset has a seven-year depreciable life for both tax purposes (IRS depreciation table) and financial reporting (your accountant’s judgment), for example, the 0.35 ratio, though fully expended this [...]

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An industry should have kinds of engine inside. It is one or more equipments that are used for the producing process of the products. Kinds of engine in an industry are usually in big size so that the production will be in the large amount. The engines are usually moved by a large dynamo. As [...]

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Beauty is woman’s belonging; it is such a sign of woman that differentiate her with men. She will so glad if there is someone who said she is beautiful and different with others, even she is in the middle-aged. Being old and get worse is thing that is so scared by every woman. Woman will [...]

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Personal identity is something private and crucial because it is related with many important things like bank account, credit account, billing and others. It is also required every time you want to subscribe or to apply on some services especially financial services. Because it is very important and private, there are many attempts to steal [...]

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Linking the Capex cash driver to sales growth does not mean that growth is the only thing driving Capex. In fact, even with no growth, replacement of fully depreciated and used-up assets is regularly necessary. A simplifying assumption here, in a no-growth scenario, is that ongoing depreciation expense is tied to the useful life of [...]

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With this broader perspective, let’s return to the specific cash-flow dimension of capital expenditures
as a cash driver. Management often finds it helpful to measure this cash driver by relating capital expenditures to sales growth. The driver is determined by dividing actual net capital expenditures by sales increase. For example, if last year’s sales were $10 [...]

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Hardware is by no means the only focus of concern. Databases, software and networks are the others. Investments in these items are also capital assets in need of management, protection and business integration. Investing in the wrong technology or failing to stay current with change can be deadly. So an organization has to make these [...]

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Depending on your business and the asset under consideration, normal depreciation schedules may not
adequately represent the true cost associated with that item’s contribution to revenue during the period. For
example, a piece of production equipment may have an economically useful life well beyond its depreciable life. In such a case, profits are understated in the earlier [...]

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