[ksdale]

If the profits from the CAPEX just get plowed into more CAPEX, though, you could end up looking like you don't have profits for decades, and it isn't necessarily a problem as long as you're growing.

Edit: What I'm saying is that profit is a lagging indicator of CAPEX, and your lack of profit now could be the result of bad CAPEX 5 years ago, or good CAPEX 5 years ago, plus aggressive new CAPEX now.

[H8crilA]

I think you don't know what "profits" are, i.e. don't know accounting.

CAPEX is written down via depreciation charges over many years. I.e. if you buy something for $1M, and it has an accounting life of 10 years, you book $100k losses per year.

What you're thinking about is called "cash flow", not "profits".

[ksdale]

Is this not basically what Amazon did? Massive capital expenditures with cascading depreciation that wiped out profits while increasing cash flow until they got to a certain size and decreased CAPEX and recognized profits?