Gross block & Capex: Constructing the Asset Schedule

  1. Financial Modelling
    1. Financial Modelling Introduction
    2. Financial Modelling Tools & steps
    3. How to Make a Financial Model and choose the best Company and Excel Workbook Setup?
    4. How to build a financial model Step-by-Step Guide to Excel Sheet Setup?
    5. Financial Statements: A Step-by-Step Guide to Extracting Historical Data
    6. Financial modelling excel
    7. Learn financial modelling Balance Sheets, P&L, and Assumptions Know About
    8. What is financial modelling Assumptions and Projections?
    9. Financial modelling and valuation
    10. Investment decision calculation
    11. The balance sheet’s asset side reveals the company’s line items.
    12. Revenue Model & Growth Rate in in P&L Assumptions
    13. Basics of financial modelling CAPEX and Asset Schedule
    14. Financial Analysis: Gross Block and CAPEX
    15. Gross block & Capex: Constructing the Asset Schedule
    16. Depreciation : Connecting P&L and Balance Sheet for Accurate Asset Forecasting
    17. depreciation expense : Exploring Different Methods in Financial Modeling
    18. Debt Management: Connecting P&L and Balance Sheet for Accurate Liability Projection
    19. Interest Rate Calculation & Debt Schedule
    20. Share Capital & Reserves
    21. IPOs and Under subscription : Bata’s Share Capital Dynamics
    22. Reserves & Surplus understanding Bata schedule
    23. Reserves and surplus schedule How to Build on Excel
    24. Financial modelling projections
    25. Balance Sheet Projections and Completing Reserves Schedule
    26. Cash Flow Statements Analysing Operations, Investments, and Financing Activities
    27. What Is Valuation for Investor
    28. Free Cash Flow Key Components, Formulas and How to Calculate?
    29. FCFF and FCFE uses in Mastering Free Cash Flow Calculation
    30. WACC Weighted Average Cost of Capital Analysis
    31. Market Risk Premium analysis
    32. Tax Shield and its Impact on Equity Holder Returns
    33. Weighted Average Cost of Capital and Terminal Growth in Valuation
    34. Terminal Value Understanding Perpetual Cash Flow Projections in DCF Model
    35. Learn Financial Modelling
    36. Free Cash Flow to the Firm (FCFF) Calculation with examples
    37. Stock Valuation DCF Model & Stock Market Value
Marketopedia / Financial Modelling / Gross block & Capex: Constructing the Asset Schedule

What is Asset schedule?

Let’s now begin constructing the asset schedule for the model. As a first step, we will assemble an excel sheet. This assembly is done in a similar way to other sheets in the model.

Let’s begin to implement the groundwork; hopefully, you understand what we mean.

It is evident that I have taken the closing gross block for Year 1 and utilised it as the opening gross block for Year 2.

The closing gross block for year 2 is 310.58, indicating an increase in the company’s assets.

310.58 – 257.78

= 52.80

Therefore, year two’s CAPEX must stand at 52.80 Cr. There has not been any sale of assets as the number has gone up. This can be logged on Excel.


I’ll use the same method for the remaining years in order to compute my conclusion.

The figures here correspond to those in the balance sheet, and we have been able to distinguish the CAPEX numbers from gross block, which was not expressly stated in the balance sheet.

The goal is to reach the corporation’s net block ultimately: 

Gross Block – Depreciation = Net block.

It appears straightforward, but here’s a complication.

Please have a glance at the Y2 depreciation numbers from the Balance sheet and P&L and tell me your thoughts.

The Balance Sheet of Y2 shows depreciation of 121.73 Cr, while the P&L states 24.45 Cr. What figure should you take into consideration?

You should take both into account.

Depreciation is an expense that must be reported in a company’s Profit and Loss statement. At the same time, the amount of depreciation for the current year will also be reflected in the Balance Sheet under accumulated depreciation.

Let us approach this task in an organised manner. I have structured my spreadsheet in the following manner –


Yes, we will proceed with the same principle. I’ll use year 1’s closing balance as the starting point for year 2 and then add the depreciation from the Profit & Loss account. By adding both entries together, I should get year 2’s accumulated depreciation ending balance. This number should match the amount noted in the Balance Sheet.

As the general principle states, the closing balance is 125.39Cr, yet according to the Balance sheet it’s 121.73 Cr – a discrepancy of approximately 3.66 Cr.

What causes such a discrepancy? 

The discrepancy can be explained by the minor asset write-offs and adjustments that are taken into account. We handle this as a form of non-expenditure depreciation. Taking this into consideration will make the figures reconcile.


We have now calculated the gross block and accumulated depreciation, so arriving at the netblock should be quite simple.

The net block is calculated as the difference between the closing gross block figure and the closing amount for depreciation charges.


I’d suggest you refer to the netblock number on the balance sheet for comparison.

–  What are Capex projections

Once the asset schedule is in place, we can continue by forecasting.

The CAPEX projection is vital to comprehending how the company plans to manage spending in the upcoming years. It’s usually made clear in management discussion analysis, analyst reports, or business channels.

In an interview, the CFO of Bajaj Auto made it clear that CAPEX demands for the coming years will be high. According to me, this kind of insight is more beneficial than any guesswork.

You could either try to hunt it down, or you can look for an alternative source.

Discover the typical CAPEX and anticipate that the averages will persist for the next few years.

Regarding CAPEX, you can assess the company’s history and utilise that information accordingly. If the company had been going through a time of expansion and high CAPEX expenditure, you would reduce it. Contrarily, if the company has been experiencing a low CAPEX cycle, you can slowly increase spending.

It is important to remember that management is the primary choice, but if needed, these techniques can serve as a viable alternative.

In this model, we will utilise the variable method. In the past, CAPEX was quite steep; thus, I plan to gradually reduce it because most of the firm’s CAPEX cycle is complete. Additionally, I am considering that there is no disposal of assets.


Once you have the CAPEX figure, calculating the Closing gross block number is a breeze. Let’s finish this off!

With the closing gross block number at hand, we can feed it into the balance sheet.