Capital expenditure, commonly abbreviated as CapEx, refers to the funds a company uses to acquire, upgrade, or maintain long-term physical assets such as property, buildings, machinery, equipment, or technology. These expenditures are investments intended to provide future economic benefits over multiple years, typically extending the useful life of the asset beyond one fiscal year

. Key characteristics of CapEx include:

• It involves purchasing or improving fixed assets that are capitalized on the balance sheet rather than expensed immediately on the income statement

• It is distinct from operating expenses (OpEx), which cover day-to-day operational costs like rent, utilities, or salaries and are expensed in the current period

• Examples include buying land, constructing factories, upgrading machinery, or purchasing vehicles

CapEx is crucial for business growth and maintaining operational efficiency, often financed through equity, debt, or other financial instruments

. It is also closely monitored by investors and financial analysts as it impacts a company’s cash flow and long-term financial health

. In summary, CapEx is the strategic spending on physical or intangible assets that support a company’s expansion and operational capabilities over the long term