From the course: Excel for Finance: Building a Three-Statement Operating Model

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An overview of CapEx and depreciation

An overview of CapEx and depreciation - Microsoft Excel Tutorial

From the course: Excel for Finance: Building a Three-Statement Operating Model

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An overview of CapEx and depreciation

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- [Instructor] Okay, so now that we've finished modeling out our current assets and our current liabilities, we're going to flip over now to longer term items, like the fixed assets, the revolver, the term debt, and the equity, although the equity will be fairly short. And in the next section, we're going to be modeling out the fixed assets, which is the entire reason that we're here. In the first call with the CFO, he talked about how we're going to be taking on a $4 million expansion project, either a new warehouse or an expansion of our existing one, and this cost has to be capitalized. The whole reason we're doing this is to see if we are in covenant compliance with our lenders. And so, before we model it out, I'm going to switch gears a little bit, go to my friend PowerPoint and just talk about what we are doing and more importantly, why. And so, when you capitalize an expense, what does that really mean? So, what we're…

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