1. What are Capex and Opex?

Capex (Capital Expenditures) refers to funds used by a company to acquire, upgrade, and maintain physical assets such as property, buildings, or equipment. Opex (Operating Expenses) are the costs for a company's day-to-day operations.

2. How Does the Calculator Work?

The calculator uses these simple formulas:

Where:

• Fixed Asset Purchases — Money spent on long-term physical assets
• Operating Expenses — Money spent on daily business operations

Explanation: Capex represents investments in future capabilities, while Opex represents the cost of current operations.

3. Importance of Capex and Opex

Details: Understanding the difference between Capex and Opex is crucial for financial planning, tax purposes, and business strategy. Capex typically appears on the balance sheet and is depreciated over time, while Opex is fully deducted in the accounting period they are incurred.

4. Using the Calculator

Tips: Enter your fixed asset purchases and operating expenses in your local currency. The calculator will display your Capex and Opex amounts separately.

5. Frequently Asked Questions (FAQ)

Q1: What's the main difference between Capex and Opex?
A: Capex is for long-term assets that provide future benefit, while Opex is for day-to-day operations that provide immediate benefit.

Q2: Are salaries considered Capex or Opex?
A: Regular employee salaries are Opex. However, salaries for employees working on capital projects might be capitalized as Capex.

Q3: How does Capex affect financial statements?
A: Capex appears as an asset on the balance sheet and is depreciated over time, affecting both the balance sheet and income statement.

Q4: Can the same expense be both Capex and Opex?
A: Generally no - an expense is typically classified as one or the other based on its nature and accounting rules.

Q5: Why is the distinction important for taxes?
A: Capex is typically depreciated over several years, while Opex is fully deductible in the year it's incurred, affecting taxable income differently.