Capital Expenditure Calculator

Capital expenditure is the cash a business puts into long-term physical assets: buildings, machinery, vehicles, IT infrastructure. It is not reported directly on the balance sheet, so it gets reconstructed from two figures that are: closing property, plant and equipment minus opening PP&E, plus the depreciation charged over the period. Depreciation gets added back because it reduced the book value without any cash leaving, so ignoring it would understate the spend by exactly that amount.

The loaded figures show it. Closing PP&E of 8M against opening 6M is a 2M increase, and adding back 1.5M of depreciation gives capex of 3.5M. On 30M of revenue that is a capex intensity of 11.67%. The tool also bands that intensity on fixed cut-offs at 3%, 8% and 15%, so 11.67% falls in the third band. Those cut-offs are scale markers on a single number, not sector thresholds, and 11.67% would read very differently in software than in a utility.

The reconstruction rests on an assumption that is worth stating plainly, because it fails often: it treats every movement in PP&E as capex or depreciation and nothing else. Asset disposals, revaluations, impairments and currency translation on foreign assets all move PP&E without being capex, and each of them distorts the reconstructed figure. A business that sells a division mid-period can show PP&E falling further than depreciation alone, at which point the arithmetic returns a negative capex, which is a signal that a disposal has happened rather than a spending figure.

Run it with sensible defaults

Closing PP&E of 8,000,000 against opening PP&E of 6,000,000, with depreciation of 1,500,000 and revenue of 30,000,000, gives capital expenditure of 3,500,000 and an intensity of 11.67%. The defaults are a starting point rather than a benchmark for any particular business.

One relationship the defaults expose is the ratio of capex to depreciation, which is 3.5M against 1.5M, or 233%. Under the common rule of thumb that maintenance capex approximates depreciation, that puts maintenance at 43% of the total and growth at the remaining 57%. Across a broad market sample the ratio runs lower: capital expenditure of roughly 1.49 trillion against depreciation and amortisation of roughly 1.00 trillion for 5,994 listed firms in January 2026, a capex-to-depreciation ratio of 148.6%, which implies maintenance at about two-thirds of the total. The loaded scenario is therefore a heavier growth mix than a typical listed business, not a representative one.

The levers in this calculation

A 1% change in Current PP&E (end) shifts capital expenditure by 2.29%, and the same change in Depreciation (period) shifts it 0.43%. Previous PP&E (start) moves it the other way, by 1.71%. Revenue does not enter the headline figure at all, feeding the intensity row and its band instead.

Those multipliers are the ratio of each input to the capex figure itself, which is why the smallest input has the largest leverage in reverse. Capex here is 3.5M reconstructed from an 8M balance, so the closing PP&E figure is more than twice the size of the answer it produces, and a rounding difference or reclassification in that balance shows up magnified in the result. The same holds for the opening balance. When capex is small relative to the PP&E balances behind it, the reconstruction is at its least reliable.

How the math works

Capex is closing PP&E minus opening PP&E plus depreciation. Intensity is capex divided by revenue, times 100.

The intensity figure needs one caution before it is compared with anything published. This tool measures gross capex against revenue, whereas sector tables frequently report net capex, meaning capex after depreciation is subtracted, against sales. The two are different numbers from the same accounts: at the defaults, gross intensity is 11.67% while net intensity would be 6.67%. Reading a gross figure against a table of net ones roughly doubles the apparent capital intensity, so the definition behind any benchmark matters as much as the benchmark itself.