Capital expenditure growth rate (N years)
factor.formula
Capital expenditure growth rate (N years):
in:
- :
The total amount of capital expenditures in the last 12 months (Trailing Twelve Months Capital Expenditures). Capital expenditures refer to investments made by a company to maintain or increase its operating capacity, specifically the cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets, net of the cash received from the disposal of fixed assets, intangible assets and other long-term assets. The data is calculated using a rolling 12-month calculation to smooth seasonal fluctuations.
- :
The rolling 12-month total capital expenditure for the same period N years ago. For example, if N is 2, it refers to the rolling 12-month total capital expenditure for the same point in time 2 years ago. The N value is usually in years, and the commonly used value is 2 or 3 years. When calculating, pay attention to the alignment of the time window to ensure that the base period for comparison is comparable with the current period.
- :
The number of years representing the time span. Commonly used values are 2 or 3, which represent the capital expenditure level compared with 2 or 3 years ago, respectively. In practical applications, the value of N can be adjusted according to research needs.
factor.explanation
The capital expenditure growth rate reflects the positivity of a company's long-term investment strategy and its willingness to expand. A higher capital expenditure growth rate usually indicates a company's optimistic expectations for future growth prospects, as well as increased investment in research and development, equipment renewal, and technology upgrades. However, an excessively high capital expenditure growth rate may also bring risks, such as increased cash flow pressure and lower-than-expected investment returns. Empirical studies have shown that there is a certain negative correlation between capital expenditure growth and future stock returns, indicating that investors may be cautious about over-expanded companies. In addition, changes in capital expenditures will also affect the effectiveness of traditional value factors. Therefore, in quantitative stock selection, this factor is often used in combination with other factors to more comprehensively assess the company's value and growth potential. At the same time, this factor is also widely used to analyze a company's long-term development strategy and industry competitive position.