Capital expenditures while computing the profitability
Is it okay to consider capital expenditures while computing the profitability of throughout a certain period?
Expert
No, Capital expenditure must not be considered while computing profitability as profits acquired from the capital expenditure are long term profits and can’t be given away in the same financial years in that they were paid for. They require to be spread over a number of years to demonstrate the true situation in balance sheet and in profit and loss account.
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