Capital Expenditures (CapEx)

Capital expenditures refer to the funds a company spends to acquire, maintain, or enhance long-term assets. These assets can include tangible items like equipment, property, or infrastructure and intangible assets like patents or licenses.

What it is: Capital expenditures refer to funds spent on acquiring, maintaining, or enhancing long-term assets, including tangible items like equipment, property, or infrastructure, and intangible assets like patents or licenses.

Why it is important: CapEx represents investments in long-term assets contributing to a company's growth and future economic benefits. It is distinct from day-to-day operational expenses.

How to use it in startups: Startups plan and budget for CapEx to acquire necessary equipment, technology infrastructure, or intellectual property. Effective management of CapEx allows startups to optimize resource allocation, plan for long-term growth, and improve operational efficiency.