<P> Investment is simply the net increase (decrease) in the firm's capital, from the end of one period to the end of the next period: </P> <Dl> <Dd> I t = K t − K t − 1 (\ displaystyle I_ (t) = K_ (t) - K_ (t - 1) \,) </Dd> </Dl> <Dd> I t = K t − K t − 1 (\ displaystyle I_ (t) = K_ (t) - K_ (t - 1) \,) </Dd> <P> where K represents the firm's invested capital at the end of period t . Increases in non-cash current assets may, or may not be deducted, depending on whether they are considered to be maintaining the status quo, or to be investments for growth . </P>

The excess cash generated by revenues less all operating expenses