Definition
Capital Expenditure (CapEx) is money spent by a company to acquire, maintain, or improve fixed assets such as buildings, equipment, technology, or vehicles. CapEx is recorded as an asset and depreciated over time, unlike operating expenses that are immediately expensed. High CapEx can indicate growth investment but reduces free cash flow. CapEx is found on the cash flow statement. The ratio of CapEx to depreciation shows whether a company is investing for growth or just maintaining assets.
Formula
Example
A manufacturer spending $50M annually on new equipment while depreciation is $30M is investing for growth. A company where CapEx equals depreciation is merely maintaining its existing capacity.
FAQ
What is Capital Expenditure?
Funds used to acquire, upgrade, or maintain physical assets like property or equipment.
How do you calculate Capital Expenditure?
A common formula for Capital Expenditure is: 资本支出 = 期末固定资产 - 期初固定资产 + 折旧
Why is Capital Expenditure important?
Capital Expenditure helps investors evaluate fundamental analysis and make more informed decisions.