How to Calculate CAPEX

CAPEX is an acronym for capital expenditure. CAPEX can be defined as an expenditure to purchase or repair a fixed asset. These fixed assets have multi-year depreciation and are not expensed in a single tax year.

Instructions

1. Calculate year-over-year change in assets. If a balance sheet shows assets of $1 million in 2009 and $2 million in 2010, the change in assets is $1 million.

2. Calculate year-over-year change in liabilities. If a balance sheet shows liabilities of $500,000 in 2009 and $1 million in 2010, the change in liabilities is $500,000.

3. Subtract the year-over-year change in assets from the year-over-year change in liabilities. This is your capital expenditure.