Capital expenditures

Definition

Capital expenditures are funds used by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment. These investments are made to improve the efficiency or capacity of the business over the long term.

Related terms

Fixed Assets: Tangible or intangible assets purchased for long-term use and not expected to be converted quickly into cash, such as land, buildings, or machinery.

Depreciation:

The process of allocating the cost of a tangible asset over its useful life, representing how much of an asset's value has been used up over time.

Return on Investment (ROI):

A measure used to evaluate the efficiency or profitability of an investment, calculated by dividing net profit by the cost of investing