Capital expenditure or capex refers to investment a company makes to acquire or maintain fixed assets, such a plant, machinery or buildings.
If a company thinks that the demand for its products or services is increasing, it may invest in upgrading or increasing capacities if its existing capacity may fall short.
A company’s capital expenditure is shown on the assets side of the balance sheet. This is because capex is used to create assets for the business rather than as an expense.
No comments:
Post a Comment