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Capex (capital expenditure)

Contributor(s): Brita Van Fossen

A capital expenditure (Capex) is money invested by a company to acquire or upgrade fixed, physical, non-consumable assets, such as buildings and equipment or a new business. 

There are two types of Capex – those that are invested in to maintain existing levels of operation within a company and those that are invested in something new to foster future growth. Customarily, regardless of the manner of investment, Capex is money spent with the intent of initiating future cash flow and a substantial return on investment (ROI).

Capex’s counterpart, operational expenditures (Opex), refers to the day-to-day costs of operation. A similar but not closely related term, forex, stands for foreign exchange.

See also: enterprise asset management (EAM), cost management, adaptive enterprise, capacity planning, business impact analysis (BIA)

 

 

This was last updated in February 2015

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