capital expenditure (CapEx)

Capital expenditure (CapEx) refers to the funds a business invests in acquiring, upgrading, or maintaining physical assets like buildings, equipment, or infrastructure that will benefit the company over the long term. These are substantial investments intended to improve or expand the company's operations, rather than day-to-day expenses. For example, purchasing new machinery or constructing a new office building are types of CapEx. Such investments are typically capitalized on the balance sheet and depreciated over time, reflecting their lasting value to the business.