What is a capex investment?

CapEx is the investments that companies make to grow or maintain their business operations. Unlike operating expenses, which recur consistently from year to year, capital expenditures are less predictable. For example, a company that buys expensive new equipment would account for that investment as a capital expenditure.

What is a capital expenditure (CAPEX)?

A capital expenditure (CapEx) is the money companies use to purchase, upgrade, or extend the life of an asset. Capital expenditures are long-term investments, meaning the assets purchased have a useful life of one year or more. Types of capital expenditures can include purchases of property, equipment, land, computers, furniture, and software.

How does CAPEX work?

Different companies highlight CapEx in several ways, and you may see it listed as capital spending, purchases of property, plant, and equipment (PP&E), or acquisition expenses. You can also calculate capital expenditures using data from a company's income statement and balance sheet.