capital-expenditure

Vocabulary Word

Definition

'Capital expenditure', or 'CapEx', refers to the money businesses spend on long-term physical assets or improvements to these assets. It's big money spent on things that last a long time.

Examples in Different Contexts

In corporate finance, 'capital expenditure' (CapEx) refers to funds used by a company to acquire or upgrade physical assets. A CFO might illustrate, 'This year's capital expenditure focuses on expanding our manufacturing facilities.'

Practice Scenarios

Impact

Scenario:

We're committed to reducing our carbon footprint. This will require significant measures to make our infrastructure more sustainable.

Response:

Absolutely. Our capital expenditure on renewables like solar panels can effectively reduce our carbon footprint.

Business

Scenario:

We're planning to expand our business by setting up new branches. This is going to require major investment.

Response:

Agreed. We should earmark capital expenditure in our budget for opening new branches.