Capital Expenditures (CapEx) Measure

A Capital Expenditures (CapEx) Measure is an organizational expense measure (organizational financial measure) based on capital expenditures.

• Context:
  • It can (often) be a Organizational Economic Measure.
  • It can (often) be referenced by a Cash Flow Statement (under, for example, "Investment in Plant, Property, and Equipment").
  • It can range from being a Historical CAPEX to being an Expected CAPEX.
  • …
• Example(s):
  • a Software-based Company CAPEX.
  • a Physical Assets CAPEX, of expenditures such as buildings, equipment, machinery, and vehicles.
  • …
• Counter-Example(s):
  • Operational Expenses (OpEx), such as Cost of Goods Sold (COGS).
• See: Fiscal Year, Cash Flow Measure.

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References

2022

• https://www.investopedia.com/ask/answers/112814/whats-difference-between-capital-expenditures-capex-and-operational-expenditures-opex.asp
  • QUOTE: Capital expenditures (CapEx) are major purchases a company makes that are designed to be used over the long term. Operating expenses (OpEx) are the day-to-day expenses a company incurs to keep its business operational.
    • Capital expenditures (CapEx) are a company’s major, long-term expenses, while operating expenses (OpEx) are a company’s day-to-day expenses.
    • Examples of CapEx include physical assets, such as buildings, equipment, machinery, and vehicles.
    • Examples of OpEx include employee salaries, rent, utilities, property taxes, and cost of goods sold (COGS).
    • Items covered by OpEx often have a useful life of one year or less, while CapEx tends to pay for a benefit to the company for longer than one year.
    • Capital expenditures cannot be deducted from income for tax purposes, but operating expenses can be.1

2020

• (Wikipedia, 2020) ⇒ https://en.wikipedia.org/wiki/Capital_expenditure Retrieved:2020-6-23.
  • Capital expenditure or capital expense (capex or CAPEX) is the money an organization or corporate entity spends to buy, maintain, or improve its fixed assets, such as buildings, vehicles, equipment, or land. It is considered a capital expenditure when the asset is newly purchased or when money is used towards extending the useful life of an existing asset, such as repairing the roof. Capital expenditures contrast with operating expenses (opex), which are ongoing expenses that are inherent to the operation of the asset. Open includes items like electricity or cleaning. The difference between opex and capex may not be immediately obvious for some expenses; for instance, repaving the parking lot may be thought of inherent to the operation of a shopping mall. The dividing line for items like these is that the expense is considered capex if the financial benefit of the expenditure extends beyond the current fiscal year.

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