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Technology Stocks : LAST MILE TECHNOLOGIES - Let's Discuss Them Here
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To: MikeM54321 who wrote (11015)4/20/2001 11:24:10 AM
From: RAT  Read Replies (1) of 12823
 
I don't want to do the full accounting lesson here, but CAPEX hits the income statement as depreciation. There is a staggered impact from the buildout, over some agreed upon expected useful life of the equipment. This is usually considered an operating expense and therefore is reflected in operating income, net income and EPS. Some investors base decisions on EBITDA - earnings BEFORE interest, taxes, depreciation and amortization - to eliminate the impact of changing capital expenditures, but EBITDA isn't the same as EPS/ Net income.

As for cash flow, the impacting isn't on Cash Flow from operations - the spend hits cash flow from investing activities as a reduction of cash. If funds are borrowed to purchase capital, the funds purchased / repaid are captured in cash flows from financing activities.
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