Capital Expenditure

Capital expenditure means money a company spends to buy, maintain, or improve long-term assets. In simple terms, capital expenditure is spending on things that help the business operate for many years. Capital expenditure is important because it shows how much a company is investing in factories, equipment, technology, buildings, or infrastructure. High capital expenditure can support future growth but reduce free cash flow in the short term. For example, building a new factory or buying expensive production equipment is capital expenditure. Capital expenditure is not the same as operating expense. Operating expenses support daily operations, while capital expenditure is investment in long-term assets.