Explanation of Net Property, Plant, and Equipment:

Also called Capital, Long-Term, Long-Lived, or Tangible Assets and Listed on the Balance Sheet, these are the fixed assets of the company that do not get used up during the normal operation of the business. This is also why they are called long-lived.  Most of the value of these long-term assets depreciate (except land, which has an infinite life span), so the actual figure you will see will be the difference between the original cost and the cumulated depreciation.  This depreciation is spread over the "useful life" of the fixed asset.

Importance of Net Property, Plant, and Equipment:

Depending on the industry of the company, the figure for Net Property, Plant, and Equipment can vary widely.  Service companies would be expected to have a relatively low figure, and manufacturing would be expected to have a much more significant portion of their assets tied up in fixed assets. 

Useful Links:
Perform a financial analysis on your financial statement data automatically - Download a FREE trial of Value Investor
Already download Value Investor? - Order from our FAST, SECURE online order page.
What other financial terms, ratios, or other calculations would you like to see on this website or in Value Investor? Let us know!