Definition
Capital expenditure (CapEx) is the money a company spends to buy, upgrade, or maintain long-term assets like buildings, machinery, or equipment. These expenses are made to improve the company’s future growth and operations.
Example
For example, if a company spends Rupee 50 lakh to buy new machines for its factory, this is called capital expenditure because the machines will be used for many years.
Caution
Capital expenditure requires large investments and may take time to give returns. Companies should plan carefully, as overspending can affect their financial health.