Capital Expenditures (CapEx)

Capital expenditures (CapEx) are funds used by a business to acquire, maintain, or improve its physical assets, such as property, buildings, or equipment. CapEx is different from operating expenses, which are the costs associated with running a business on a day-to-day basis, such as salaries, utilities, and supplies. CapEx is typically a long-term investment that is expected to generate future benefits for the business.

For example, a company may make a CapEx investment in a new manufacturing plant that is expected to increase production and revenue in the future. CapEx is an important source of funding for businesses, and it is typically financed through a combination of debt and equity.