What are Capital Expenditures (CapEx)?

Capital Expenditures (CapEx) are funds a business spends on acquiring, upgrading, or maintaining long-term physical assets such as property, buildings, equipment, and technology infrastructure.

Examples:

• Purchasing machinery

• Building new office premises

• Upgrading IT infrastructure

• Acquiring new vehicles

Why It Matters:

• Represents investment in business growth and capacity

• Impacts cash flow and financial planning

• Reported on the cash flow statement and capitalized on the balance sheet