Capital Expenditure or CAPEX

CAPEX, or capital expenditure, is the money a business spends to acquire or upgrade physical assets such as buildings, machinery, equipment or intellectual property. It is a long-term investment that is expected to generate future benefits for the business.

CAPEX is typically classified as either maintenance CAPEX or growth CAPEX. Maintenance CAPEX is the money spent to keep existing assets in good working order, while growth CAPEX is the money spent to acquire or upgrade assets in order to expand the business.

CAPEX is an important factor in a business's financial planning, as it represents a significant investment in the future of the business. It is typically financed through a combination of debt and equity, and it is important for businesses to carefully consider the potential return on investment when deciding on a CAPEX project.

CAPEX is often contrasted with operating expenses, which are the ongoing costs of running a business, such as rent, utilities, and salaries. While operating expenses are typically expensed in the year they are incurred, CAPEX is typically capitalized, or recorded as an asset on the balance sheet, and then depreciated over time.


CAPEX and its depreciation is one of the features of the Financial Analysis Templates.