I'm doing a bit of Buffet* style analysis (buffet with a capital B, and not the one with the silent "t" ) but my major wasn't in business.

I'm using the company statistics from finance.yahoo.com and have a quick question:

Does Capital Expenditures (CapEx) include the cost of keeping the business running, such as employee salaries, supplies, etc? You know, the costs of simply running the business?

From what I found on the 'net, CapEx is simply "Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment." (from investopedia.com), but that does not seem to indicate that it includes the costs of simply doing the day-to-day business activities. What is the term for these simple day-to-day business expenses? And is it in the Cash Flow statement, or in the Income statement as "Cost of Revenue"?

Also, any recommendations for a place online that I can download the huge database of company financial information and import it into an Excel spreadsheet? I can get the info one-at-a-time from finance.yahoo.com... but I'd be willing to pay a few bucks to simply have all the info at once for all the companies. Any recommended sources? What about the SEC?

Thanks!

 

Capital expenditures are, as you discovered, expenditures on fixed assets, plant, equipment, real estate, that sort of thing.

The costs of running a business day-to-day are known as operating expenses, and will appear on the income statement. The cash portion of these expenses will appear on the cash flow statement under cash flow from operations; the noncash portion - depreciation, for example - will not appear on the cash flow statement.

As to where you could get Excel-ready data . . . well, in the immortal words of Socrates: You got me!

 

You can capitalize labor if it is used to support a capital project. For example if you assigned a regular employee as a SME (subject matter expert) to a project and hired a person to fill his spot you can capitalize the fill in labor.

 

So, can I then conclude that CapEx is money spent to expand the business? Such as a new store, new factory, etc?

re: Excel-ready data... I'm hoping I won't have to learn how to write a script of some sort and have it go through finance.yahoo.com's database one-at-a-time.

Thanks for the help Magician!

 

mns2k, thanks for the input! that's definitely eye-opening.

I didn't realize the significance of when my company made me the SME of our IP network, that they were able to shift the cost of my salary to the CapEx column. I'm going to have to bring that up at my next salary review.

 

Hoovers has a subscription service that will allow you to download company financials in Excel/CSV format. I'm not sure if it allows you to get info for multiple companies at once, but it's worth checking out:

http://www.hoovers.com/

There should be a "Build Report" button somewhere on their site that describes the Excel/CSV downloads.

 

[QUOTE=tritium_pie,Dec 22 2005, 06:56 AM]So, can I then conclude that CapEx is money spent to expand the business?

 

I wouldn't, if I were you.

If they expense your salary they lower current income taxes; if they capitalize your salary they don't lower current income taxes. Hence, you're more expensive if they've shifted your salary into the CapEx column. They might lower your salary at your next review.

 

^
while they pay more taxes this year the capex will save them taxes in subsequent years, too. Thus, from a tax perspective from a multi-year horizon, the cost is the same.

 

Only if you ignore the time-value of money. A dollar today is worth more today than it is tomorrow.