Maintenance CapEx
Short definition
Maintenance capex is the capital spend needed to keep current capacity and safety. It does not create growth; it is deducted in FCF and CFADS before EBITDA is treated as sustainable.
Detailed explanation
Depreciation is a crude proxy and misses inflation, technology and a deferred-maintenance overhang. Historical-cost depreciation in Türkiye often undershoots replacement cash; the budget is built from quantities and unit prices.
The credit agreement embeds “maintenance capex” in CFADS as EBITDA − ΔNWC − maintenance − cash tax. Whether spares and major turnarounds sit in that definition is contractual. Deferral lifts near-term CFADS and stores cash and breakdown risk into the next year.
Why it matters for the CFO
Putting a multiple on forward EBITDA without maintenance cash inflates value and debt capacity.
How to read it
Maintenance / depreciation below 1 is deferral or a historical-cost gap. Do not invent a threshold without cycle and plant age. Booking a one-off turnaround as “growth” pollutes CFADS.
Related calculators
Güven Sayılgan’s writing on this topic
What Do Cash Flow Available for Debt Service (CFADS) and the Debt Service Coverage Ratio (DSCR) Mean?
CFADS shows how much cash from operations can be allocated to interest and principal; DSCR shows how far that cash covers current debt service. Debt capacity is
9 min read
Read → FinansCan Forward-Looking EBITDA Be an Appropriate Choice in Company Valuations?
The forward EV/EBITDA approach may be more meaningful than trailing multiples for fast-growing firms whose current EBITDA does not reflect sustainable capacity—
12 min read
Read → FinansWhen Do Firms in Türkiye Experience Cash Squeezes Most Often?
Cash squeezes are not driven by tax dates alone; interest rates, banks’ appetite to lend, the exchange rate, inventory costs, collection periods, and sales temp
3 min read
Read →Read these first
Related terms
What to learn next
Definitions are educational. They are not investment, credit or tax advice.