easy · Private Credit & Debt underwriting-credit-analysis
Why is 'Maintenance Capex' often subtracted from EBITDA in the FCCR calculation?
- Because interest payments are tax-deductible while capex is not.
- Because maintenance capex is a necessary cash outflow to keep the business running and is not available for debt service.
- To increase the EBITDA and make the company look more profitable.
- To encourage the company to sell its old machinery and equipment.
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