What is Capital Expenditure?

Capital expenditure, or capex for short, is the fund used by a company to procure, maintain or improve its fixed assets. As it is typically an investment, we can figure out the capital expenditure from a company’s balance sheet. We can also calculate the capital expenditure using the capex equation:

Capex = Change in PP&E + Current Depreciation

Where, PP&E = Change in property, plant and equipment

Change in PP&E = PP&E during the current period – PP&E during the prior period

Usually at the top of the agenda for most CFOs, capex is highly strategic and its sourcing is not a straightforward process. Capital sourcing and capital sourcing management and planning are interdependent and therefore difficult to execute separately. Learn more about GEP’s capex or capital expenditure services.

Related Terms

What is Calculate Direct Cost?What is Capital Purchases?What is Catalog?What is Category?What is Category Management?