Net Capital Spending Calculator

Formula

The formula to calculate the net capital spending is:

\[ NCS = EFA - BFA + D \]

Where:

$ NCS $ is the net capital spending ($)
$ EFA $ is the ending fixed assets ($)
$ BFA $ is the beginning fixed assets ($)
$ D $ is the total depreciation

What is Net Capital Spending?

Net capital spending is defined as the fixed asset values minus the depreciation. It represents the amount spent on fixed assets after accounting for depreciation. This metric is important for understanding a company's investment in its fixed assets over a period.

Example Calculation

Let's assume the following values:

Ending Fixed Assets (EFA) = $50,000
Beginning Fixed Assets (BFA) = $30,000
Total Depreciation (D) = $5,000

Using the formula to calculate the net capital spending:

\[ NCS = 50,000 - 30,000 + 5,000 = 25,000 \]

The net capital spending is $25,000.