Capex as it relates to the business acquisition. Capex = Capital Expenditures. The grey scale of how to treat Capex in the business acquisition process is often determined by the nature of the capital expenditures themselves. There are three predominant reasons for Capex: Maintenance, Growth, and Tax Strategy. Before automatic deductions to earnings are made, ideally both the buyer and the seller should agree in principle on the nature of capital expenditures and reason from there.
The Capstone M&A Term of the Week is "Capital Expenditures". Every week, we feature a different M&A-related term, providing clear and easy-to-understand explanations. For all Capstone M&A Terms of the Week and additional educational resources, check out the link below: https://lnkd.in/gTsKT5Wp