Hi, can pls somebody tell me whats the best way to assume the net capex addition while valuing an aerospace system and subsystem manufacturing company ?
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Property Plant And equipment (t) - PPE(t-1) + Depreciation gives you Capex. You remove the depreciation again to get Net Capex. Don't forget to adjust for OL and R&D.
BruLee, thanks for your reply. Apologies for not putting the qs currently. To set the context, I am trying to do a valuation for a manufacturing company where the data is fairly limited at this point in time. There is not much insights on the future capex investments and also we are not sure of the utilization of the current fixed assets, hence using Net Block to Sales proportion for future capex investments might not give the best results.
Any suggestions on what could be a reasonable set of assumptions for forecasting the capex investments (Gross block). We do have last derpreciation schedule.