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Hi Hewitt, thanks for replying.

I think I'm missing something fundamental or really simple. As I understand it, investment in fixed capital is the amount that a company has spent on property/equipment/etc. When we want to find the investment in fixed capital, why isn't it just the Purchases of PP&Eq line in the cash flow statement?

Are you subtracting the Dep/Amort amount from PP&Eq just to account for the fact that it has already been subtracted from revenue to determine net income? If that's the case, I would argue you shouldn't say

Investment in Fixed Cap = (Purchases in PP&Eq - Depreciation/Amort)

but rather,

Investment in Fixed Cap = Purchases in PP&Eq
Corrected Net Income = Net Income + Depreciation/Amort

Then again, maybe I'm completely misunderstanding.

An example we can use is CMG (http://library.corporate-ir.net/library/19/194/194775/items/244819/Chipotle_AR06.pdf , pg 45)

Net Income = $ 41,423
Depreciation and amortization = 34,253
Purchases of leasehold improvements, property and equipment, net = (97,312)

Thanks,
Ed

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