Module I· PP&E, Capex & D&AIntermediate
Question
What does the typical PP&E roll-forward look like?
Answer
Mechanics
Standard forecast mechanics in every 3-statement model.
Formula
```
Ending Net PP&E = Beginning Net PP&E
+ Capex (cash investment from CFI)
− D&A (from income statement, non-cash)
− Net book value of disposals
+ Net PP&E of acquired targets
− Impairment charges
```
This bridge must match balance-sheet PP&E exactly. If it doesn't tie out: often double-counted capex or a forgotten asset-disposal book value.
Deep diveShow more details
Example — Global Chemicals Corp
Inputs:
- Opening Net PP&E: 500
- Capex: +60
- D&A: −45
- Disposals: −5 (net book value of disposals, not sale proceeds)
Calculation:
```
Ending Net PP&E = 500 + 60 − 45 − 5 = 510
```
Pitch tip
The PP&E bridge is a standard output in DD reports — it shows the investment cycle and asset aging.