Financial StatementsIntermediate
Capex
Capital expenditure
Money spent on buying or upgrading long-term assets like plants and machinery.
Detailed explanation
Capex appears in investing cash flow and becomes an asset on the balance sheet, then is depreciated over time.
Why it matters
Heavy capex today can mean growth tomorrow, but it reduces free cash flow now.
Key points
- Maintenance vs growth capex.
- Shown in investing cash flow.
- Subtracted to get free cash flow.
Related terms
More in Financial Statements
Educational content only. Definitions and examples are illustrative and are not investment, tax or legal advice.