🛠️ A business showed stable free cash flow—until we noticed recurring CapEx was buried in “repairs and maintenance.”

Turns out:

• $22K/year went to new equipment
• Another $14K for upgrades they made annually
• But none of it was treated as CapEx

Once we corrected for true capital needs, cash flow dropped—and so did the value.

Free cash flow = earnings after realistic reinvestment needs.