CapEx
Business & Finance abbreviation · Finance
| Stands for | Capital expenditure |
|---|---|
| Categories | Business & Finance |
CapEx stands for Capital expenditure, a finance abbreviation.
Money a company spends to buy, upgrade or extend the life of long-term physical or intangible assets such as buildings, machinery, vehicles and software. Instead of being expensed immediately, it is capitalized on the balance sheet and depreciated or amortized over the asset's useful life.
Example: The chipmaker raised its CapEx guidance to $28 billion to fund two new fabrication plants.
Usage notes
Also written capex or CAPEX. Analysts often split it into maintenance capex, needed to keep existing capacity running, and growth capex, which expands the business. CapEx appears in the investing section of the cash flow statement, and subtracting it from operating cash flow gives free cash flow. The CapEx-versus-OpEx distinction matters for budgeting, earnings and taxes.
Related abbreviations
More finance abbreviations
- APA – Asset purchase agreement
- APV – Adjusted present value
- ARR – Annual recurring revenue
- ATM – At-the-market offering
- AUM – Assets under management
- CAGR – Compound annual growth rate
- CAPM – Capital asset pricing model
- CCC – Cash conversion cycle
- CIM – Confidential information memorandum
- CVC – Corporate venture capital
- D/E – Debt-to-equity ratio
- DCF – Discounted cash flow