A great company with a Durable Competitive Advantage will have a ratio of Capital Expenditures to Net Income of less than 25%. Less is better.

Capital Expenditures are expenses on:

• fixed assets such as equipment, property, or industrial buildings
• fixing problems with an asset
• preparing an asset to be used in business
• restoring property
• starting new businesses

A good company will have a ratio of Capital Expenditures to Net Income of less than 50%. 

A great company with a Durable Competitive Advantage will have a ratio of less than 25%. 

Less is better.


http://equitybondtheory.com/cash-flow/capital-expenditures