Definition
Maintenance CapEx is spending required to keep current operations running without expanding capacity.
Formula
Maintenance CapEx = total CapEx - growth CapEx (estimate)
Example
If total CapEx is $500k and $200k is for new growth projects, maintenance CapEx is $300k.
How to use it
- Separate maintenance from growth to avoid overstating free cash flow.
- Review asset lifecycles to estimate recurring replacement spend.
Common mistakes
- Treating all CapEx as growth and inflating cash flow quality.
- Ignoring rising maintenance needs as systems age.
Why this matters
This term matters because cash timing and risk are usually the difference between a plan that works on paper and a plan that survives. Use consistent definitions so decisions are comparable over time.
Practical checklist
- Write a 1-line definition for "Maintenance CapEx" that your team will use consistently.
- Keep the time window consistent (weekly/monthly/quarterly) when comparing trends.
- Segment results (channel/plan/cohort) before drawing big conclusions from blended averages.
- Sanity-check with a related calculator from the same category on MetricKit.
- Read the related guide (e.g., Investment decision metrics: NPV vs IRR vs payback vs PI) for context and common pitfalls.
Where to use this on MetricKit
Calculators
- Cash Runway Calculator: Estimate runway from cash balance, revenue, gross margin, and operating expenses (optionally with revenue growth).
- Break-even Pricing Calculator: Compute contribution margin, break-even units, and profit at a given volume based on price and variable costs.
- DCF Valuation Calculator: Estimate enterprise value using a simple DCF: forecast cash flows, apply a discount rate (often WACC), and add a terminal value.
- Investment Decision Calculator: Evaluate an investment using NPV, IRR, discounted payback, and profitability index from simple cash flow assumptions.
- Profitability Index Calculator: Calculate profitability index (PI) from discounted cash flows and estimate the max investment for a target PI.
Guides
- Investment decision metrics: NPV vs IRR vs payback vs PI: A practical guide to investment decision metrics: when to use NPV, when IRR misleads, and how payback and profitability index fit in.