Capital Expenditure

Capital expenditure (CapEx) is the funds a company allocates to acquire, maintain, or upgrade long-term assets such as machinery, equipment, or property. Unlike operational expenses, CapEx focuses on investments that enhance a firm’s capacity or efficiency, often yielding benefits over years. For example, purchasing new factory equipment or renovating a building qualifies as CapEx. It’s a key indicator of a company’s growth strategy and financial commitment to future operations, typically funded through cash reserves, loans, or equity, reflecting its ambition to expand or sustain competitiveness.