What is capital expenditure?

Capital expenditure or capex refers to investment a company makes to acquire or maintain fixed assets, such a plant, machinery or buildings. If a company thinks that the demand for its products or services is increasing, it may invest in upgrading or increasing capacities if its existing capacity may fall short. A company’s capital expenditure is shown on the assets side of the balance sheet. This is because capex is used to create assets for the business rather than as an expense.


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