Finance and accounting
Capex (capital expenditure)
Spending on long-lived assets such as machines and buildings.
Last reviewedWhat does Capex (capital expenditure) mean?
Capital expenditure is money spent on assets that last more than a year, such as factories, machines and software. It is recorded on the balance sheet and then expensed gradually through depreciation or amortization, rather than counted as a cost all at once.
Where does it come up in case interview prep?
- Supply chains explainedLesson in How industries work: the toolkit
- Cost structures, margins and capital intensity across industriesLesson in How industries work: the toolkit
- A light balance sheet, and why profit is not cashLesson in Business basics for non-business learners
- Industry primers: airlines, pharma, software, energyLesson in Business basics for non-business learners
- Market expansionLesson
- Cost reduction and cost cuttingLesson
- How hotels and travel companies make moneyLesson in Hotels and travel
- Airline unit economics: RASK, CASK, load factor, fuel, and leasingLesson in Airlines, airports, and aircraft leasing
Related terms
- Depreciation and amortizationSpreading the cost of a long-lived asset over its useful life.
- Opex (operating expenses)Running costs that are not part of COGS.
- Free cash flowCash from operations minus capital expenditure.
- ProfitThe money left over after costs. Revenue minus cost.
- RevenueMoney earned from sales, before costs.
- CostWhat it takes to make and sell the product in a period.
- Fixed costA cost that stays the same when volume changes, within a normal range.
- Variable costA cost that rises and falls with how much you make.