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Are capital expenditures included in EBITDA?

No, capital expenditures relate to the purchase of physical assets/equipment for the business. The cost is capitalized into PP&E and then depreciated over the useful life of the asset.

Since depreciation expenses is added back to net income to calculate EBITDA, then capital expenditures are excluded.

However, capital expenditures are included in the investing section of the cash flow statement (#1 below).


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