Capital Expenses

Capital expenses, or capital expenditures (CapEx), refer to the funds a business uses to purchase, upgrade, or maintain physical assets like buildings, machinery, or equipment. These are significant investments intended to improve or extend the life of an asset over time, rather than being just short-term costs. Unlike regular operating expenses (like monthly bills), CapEx is often depreciated over several years on financial statements, reflecting the long-term value these assets bring to the organization. Understanding CapEx is essential for evaluating a company's growth potential and financial health.